July 29, 2025

Episode 189: Gold Is Shiny- But Is It Smart?

38 minutes

In this episode of Retire with Style, Wade Pfau and Alex Murguia tackle listener questions on a range of financial topics, including gold’s volatility, alternative investments, and how to measure retirement success. They discuss the realities of investment returns, the impact of recent U.S. bond downgrades, and the importance of understanding risk, using historical data, and maintaining a solid investment strategy in retirement.

Takeaways

Gold has lower average returns and higher volatility than stocks.

Alternative investments require careful evaluation due to lack of historical data.

Quantifying retirement success rates can provide clearer financial goals.

The magnitude of failure in financial planning is crucial to understand.

Investors should assess the compensated risk of their investments.

Monte Carlo simulations can help in understanding potential outcomes.

The funded ratio approach simplifies retirement planning.

US bond downgrades may not significantly impact long-term market trajectories.

Understanding the underlying assumptions of financial plans is essential.

Risk assessment is a key component of effective financial planning.

Chapters

00:00 Introduction and Overview of Q&A Session

02:33 Debating Gold's Volatility and Investment Value

08:56 Exploring Alternative Investments and Their Evaluation

19:03 The Importance of Theoretical Justification in Investments

20:17 Understanding Retirement Planning Tools

23:04 Probability of Success vs. Rate of Return

27:21 Magnitude of Failure in Financial Planning

30:31 The Funded Ratio Approach

34:06 Evaluating Financial Advisors

36:15 Impact of US Bond Downgrades

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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By Wade Pfau & Alex Murguia

3.9

156156 ratings