Podcast Summary

Podcast: Ready For Retirement
Host: James Conole, CFP®
Episode: 3 Investments That Should Never Go In Your Retirement Portfolio
Date: October 21, 2025

Episode Overview

In this episode, host James Conole discusses the three types of investments that he believes should never be included in your retirement portfolio: gold, overly concentrated stock positions, and your primary home. James provides historical context, data-driven insights, and practical examples to help listeners understand why these investments can jeopardize their retirement security. The focus throughout is on stability, income consistency, and avoiding unnecessary risks within retirement accounts.

Key Discussion Points & Insights

1. Why Gold Doesn’t Belong in Your Retirement Portfolio

[00:00-17:30]

• Goal of Retirement Accounts:

  • Growth to maintain purchasing power and offset inflation
  • Protection against inevitable market downturns

• Gold’s Historical Returns:

  • 1934-1970: Gold was pegged at $35/oz due to the Gold Reserve Act.
  • 1972-1979: After the gold standard was removed, gold returned 36% per year (due to the peg being lifted, not due to intrinsic value) vs. the U.S. stock market’s 4.6%.
  • 1980s: S&P 500 returned 17% per year. Gold lost 2.5% per year.
  • 1990s: S&P up 15.3%. Gold averaged –3.3% per year.
  • 2000s: S&P had a negative 1% return. Gold up 13.9%.
  • 2010s: Gold returned 2.9%/year; S&P 13.4%/year.
  • Since 2020: Both asset classes in the low/mid teens.
  • Long-term: Gold annualized at 7.4%; U.S. stocks at 10.5%.
    • Removing the run-up in the 1970s, gold’s return is closer to 4% per year since 1980.

• Risk & Volatility:

  • Standard deviation (risk measure): Gold ~20%, S&P 500 ~15-16%.
  • “The higher the standard deviation on an investment, the more volatile it’s going to be, the more it’s going to fluctuate.” (James, 13:47)
  • Gold’s worst drawdown: -62% from 1980, with a 26-year period of zero return.
  • U.S. stocks’ worst: -51% (2007-2009), recovered much faster.

• Memorable Quote:

  • “If you happen to be a retiree at the beginning of that and you had an asset that returned a negative return for the first 25 and a half years and didn’t break even until 26—that’s not a great asset for your retirement.” (James, 16:41)

• Conclusion: Gold fails both on strong-return and protection metrics and is too volatile and unpredictable for core retirement funding.

2. The Peril of Overly Concentrated Stock Positions

[17:31-26:59]

• Definition: Large portion of portfolio in a single company’s stock.

• Personal vs. Retirement Investing:

  • It's fine to hold concentrated positions for personal reasons or with excess assets, but not within the core retirement portfolio.
  • “That cannot be what you have in your retirement portfolio. You need to think of your retirement portfolio saying, what's the balance that I need so that I can meet my income needs throughout retirement?...” (James, 19:03)

• Withdrawal Strategy (The $1M Example):

  • Needing $75,000/year in retirement, $25,000 supplied by Social Security, $50,000 needed from investments.
  • Safe withdrawal rate: 5% (based on research like Bill Bengen’s), requiring a $1 million portfolio.

• Diversification Maximizes Success:

  • “One of the reasons that we diversify is because it’s actually maximizing our potential to get the highest possible returns. Being more concentrated simply means we have more range of expected outcomes. The potential highs will be higher, but the potential lows will be lower.” (James, 24:21)

• Guidance:

  • If all your nest egg is needed for retirement, it must be diversified—not committed to any one stock.
  • Holding concentrated positions is for funds above and beyond what’s needed for retirement security.

3. Your Home Is Not a Retirement Asset

[27:00-30:58]

• Common Misconception:

  • Listeners often include home equity when discussing retirement assets or net worth.
  • “If all your net worth or the majority of your net worth is in your home, that’s not going to support your retirement needs.” (James, 27:33)

• Downsides:

  • Your primary home doesn’t create cash flow.
  • The only ways to unlock value:
    • Renting it (and disrupting your living situation)
    • Borrowing against it (home equity loan or reverse mortgage)
    • Selling and downsizing

• Additional Costs:

  • Larger homes mean higher maintenance, property taxes, and expenses—more liability than asset for cash-flow planning.

• Memorable Quote:

  • “Your home’s not actually going to lock any ability to create cash flow, which is actually what you’re most concerned about in retirement.” (James, 28:15)

Timestamps for Important Segments

• 00:00–05:50 – Introduction and guiding principles for retirement investing
• 05:51–17:30 – The historical performance and risks of gold
• 17:31–26:59 – The dangers and misconceptions of concentrated stock holdings
• 27:00–30:58 – Why your home is not a retirement portfolio asset
• 30:59–End – Summary: The desirable profile of retirement investments

Tone and Final Thoughts

James’s tone is clear, friendly, and data-driven, emphasizing the goal of retirement planning: to create security and peace of mind, not to chase speculative returns. He reminds listeners that their retirement assets should prioritize income reliability, protection, and sustainable growth—not illiquid, risky, or volatile holdings.

Summary Message:
As you build your retirement portfolio, focus on assets that reliably offer growth and protection—avoid gold, concentrated stocks, and treating your home as a cash-flow solution. Diversification, liquidity, and sustainability are key to retiring with confidence.

Notable Quotes Recap:

• “That’s not a great asset for your retirement.” (16:41)
• “One of the reasons that we diversify is because it’s actually maximizing our potential to get the highest possible returns.” (24:21)
• “Your home’s not actually going to lock any ability to create cash flow, which is actually what you’re most concerned about in retirement.” (28:15)