Episode 182: When Disaster Strikes… Should You Invest?

Retire With Style

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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

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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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