This article was originally published in our weekly newsletter.

Today’s email may be a bit strange.

If you would, indulge me for a moment (it’ll be worth it).

Let’s assume you like to eat cookie dough.

You have flour, sugar, eggs, butter, etc., as ingredients.

You like how it tastes when it is all mixed together.

However, would you like each ingredient on its own?

If offered, would you eat a spoonful of sugar?

Most would say yes.

How about a spoonful of flour?

Tablespoon of butter?

If offered, would you eat a raw egg?

I have met very few people who would be willing to eat an egg raw, right out of the shell (with the exception of Rocky).

However, when it comes to baking cookies, the egg is one of the most important ingredients.

Eggs act as the binding agent, keeping the cookie together when it bakes.

What does this have to do with your portfolio?

Eggs represent the investments or products within your portfolio that you may not want, but probably need in retirement.

It’s the investment or product in your portfolio that can help you maintain your quality of life when markets go down.

It’s the part of your portfolio that helps smooth out the ups and down of a volatile market.

Examples could be CDs, Bonds, Fixed or Fixed Indexed Annuities, Buffered-ETFs, and so on.

These investments and products may not help you get rich, but they are there to help you stay rich.

The Takeaway

A recipe only works when you have the right amount of the right ingredients.

A portfolio works best (in my opinion) when you have the right amount of the right investments and products in your portfolio.

It’s all about what you want your money to do.

That goal should shape your portfolio, not some arbitrary 60/40 split or some risk tolerance questionnaire.

You deserve better than that.