"Concentrated" 100% Stocks

aka "High Conviction" not fully diversified aka "20 Best Stocks" (aspirational)

Advantages

1. Largest potential gain of stock investing
2. You know what you own - typically
3. Typically liquid every business day at Fair Market Value
4. Potentially understandable reasons & criteria for owning each stock. 

Disadvantages

1. Potentially biggest loss of capital
2. Picking Winners & Losers
3. Higher expenses to pay professional manager
4. Historically collectively inferior track record to 100% stock index

100% stock index fund

Advantages

1. Historical upside potential
2. Very low expenses
3. Liquid every business day
4. Index is an objective criteria for inclusion

Disadvantages

1. Large potential for capital loss.
2. Historical capital losses at times.
3. Index so popular could increase volatility
4. No quality criteria for inclusion; only included because in an index

100% Risk-Managed stocks

Advantages

1. Potential and Objective: Smaller capital losses than index
2. Historical results
3. Quality and / or measurement criteria for inclusion. Not simply because in an index.

Disadvantages

1. Capital loss potential
2. Higher expenses than Index to pay professional management
3. Upside potential might be less than 100% stock index

Investment-grade individual bonds

Advantages

1. Issuer usually "bound" to return principal at maturity or call
2. Principal known in advance
3. Issuer usually "bound" to pay stated interest - typically twice per year
4. Interest rate known in advance - predictable.
5. Liquid every business day at Fair Market Value

Disadvantages

1. Historically lower return than stocks
2. Interest-rate risk. When a bond matures a new bond might only be available at a lower interest rate
3. Fair market value fluctuates before maturity or call

Bond Funds

Advantages

1. Lower loss potential than stocks
2. Sometimes higher potential upside than Individual Bond Ladder
3. Typically lower dollar minimums than Individual Bond Ladder
4. Opportunity for much more diversification than Individual Bond Ladder
   A. Many more bonds
   B. Several more categories of bonds
5. Liquid every business day at Fair Market Value
6. Professional Managers (e.g. CFA) available with many years of experience & results

Disadvantages

1. Larger loss potential than individual bonds
2. Individual bonds held to maturity typically have return of principal obligation by issuer, but ...
3. Bond Funds do not necessarily return principal.

Guaranteed (joint) lifetime income
with market participation
and access to your money

1. Guaranteed (joint) lifetime income paid as long as either spouse is alive
2. Market participation
3. Access to your money
4. Guaranteed amount or more paid every time

What I don't like about "guaranteed lifetime income ..."

1. Expenses
2. Lower return than e.g. underlying index due to higher expenses
3. Complexity

Money Market etc.

Advantages

1. Liquid every business day without penalty at Fair Market Value
2. Historically low volatility
3. One of the most conservative choices

Disadvantages

1. Historically and typically lower return than other choices

How much of your retirement nest egg would you like in each?

The views stated in this letter are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors should consider their financial ability to continue to purchase through periods of low price levels. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. Exchange traded funds (ETFs) and mutual funds are sold only by prospectus. Investing in ETFs and mutual funds is subject to risk and potential loss of principal. ETFs incur trading and commission costs similar to stocks and frequent trading can negate the lower cost structure of an ETF. There is no assurance or certainty that any investment or strategy will be successful in meeting its objectives. Investors should consider the investment objectives, risks and charges, and expenses of the fund carefully before investing. The prospectus contains this and other important information about the fund. Contact your registered representative of the issuing company to obtain a prospectus, which should be read carefully before investing or sending money. The return and principal value of fixed income securities fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their original value. All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful. Guarantees are based on the claims paying ability of the issuer.