Concept: Iran's Strategic Options
Back down
Escalate and risk a war they likely can't win
Repeat their April salvo, which could be ineffective or potentially escalate the situation
Stall for a diplomatic solution or ceasefire1
Insight: Iranian Regime Behavior
Iran is unlikely to cease aggressive behavior as the regime doesn't believe its own security is at risk1
Concept: Investment Strategy
Aggressive investor pursuit strategy: 80% equities, 20% bonds, 20% Managed Futures (MF)
Alternative: 80% stocks, 20% bonds, 30% MF
Using leverage to diversify can be harmful if used to buy more of the same asset
Suggested allocation: 45% equities, 30% bonds
Bonds and MF have the best overlap
RSST: 1:1 US Equities and MF
RSBT: 1:1 bonds and MF
Staggered rebalancing: 1/4 each quarter to avoid luck cutting against you8
Concept: Bond Investment Strategy for Retirees
Need $50K with 1-year maturity or less
$50K with 2-year maturity or less
5-year timeframe is a good starting point for bond ladder
Consider tax bracket and current rates when choosing bonds
Use bonds as an emergency fund during market downturns
Bond funds may offer better prices and professional management9
Principle: Risk Management in Retirement
Balance risk capacity (financial ability to take risks) with risk tolerance (emotional capacity to handle market fluctuations)
Adjust stock allocation based on personal comfort level and past behavior during market crashes9
Connections and patterns:
Both the Iran situation and investment strategies involve managing risks and considering multiple potential outcomes.
The notes emphasize the importance of diversification and strategic planning in both geopolitical and financial contexts.
Broader pattern:
The notes reflect a focus on long-term strategic thinking and risk management across different domains (geopolitics and personal finance).