Retire With Style

Episode 182: When Disaster Strikes… Should You Invest?

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In this episode of Retire with Style, Wade Pfau and Alex Murguia explore alternative investments with a focus on natural resources, commodities, and catastrophe bonds. They break down the strategies and risks behind these asset classes and examine how they can fit into a diversified retirement portfolio. The conversation offers insights into the potential advantages and challenges of these investments for retirement planning.

 

Takeaways

  • Natural resources include timberland, farmland, and water rights.
  • Commodities can serve as an inflation hedge but are volatile.
  • Catastrophe bonds transfer natural disaster risk to investors.
  • Investing in companies that use commodities may be more beneficial.
  • The correlation of commodities to equities is generally low.
  • Catastrophe bonds can provide uncorrelated returns to the market.
  • Investors should consider the expected return for each asset class.
  • Due diligence is essential when exploring alternative investments.
  • Infrastructure investments can offer stable returns through usage fees.
  • The role of portfolio managers is to expose investors to asset classes with favorable risk-return profiles.

    • Chapters

    00:00 Introduction to Alternative Investments

    02:22 Exploring Natural Resources and Commodities
    11:53 Understanding Catastrophe Bonds
    21:18 Evaluating Risks and Returns in Catastrophe Bonds

     

    Links

    Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it!

    The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

    This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

     

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    Retire With StyleBy Wade Pfau & Alex Murguia
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