A recent article argues that investors in steady jobs (government, teachers, etc) should balance out their steady & predictable “bond-like” pay check by buying more stocks in their retirement accounts, while investors in risky jobs (entrepreneurs, sales, etc.) should load up on more stable investments like bonds to lower their overall risk.
Maybe on paper this concept seems like a good idea. If an investor could check emotion at the door, maybe a concept like this could work. But it fails to incorporate the investors goals and risk tolerance. And investors can’t check emotion at the door. Most investors keep salary and investment performance in separate buckets.
The only time we’ve used this approach is to developing income distribution strategies for retirees with part-time jobs, second careers, or owning a small business.
I’m interested in your thoughts? Do you like the concept? Send me your thoughts and I will post them.