Ask the Fool Doing the Dow Shuffle I saw that ExxonMobil was Qremoved from the Dow Jones Industrial Average. What hap- nest egg last longer for retirees with- pened? — G.V., Tulsa, Oklahoma Fool’s School My Dumbest Investment The Motley Fool Take drawing smaller percentages, but that Many don’t realize this, but the having at least 50% in stocks is best Out of Stock For Good and ADow Jones Industrial Average Withdrawing Money for most portfolios. (“the Dow”) is an index of only 30 Unless you have a huge nest egg, My dumbest investment was acci- Bad Times companies. Every few years, to bet- in Retirement­ these rates won’t give you a lot each dentally selling my shares of Shop- ter reflect our diversified economy, Retirement planning is tricky. Not year. With a $300,000 portfolio, for ify at $38, when I had intended to Some businesses are hurt more than only do we need to save enough buy more. I didn’t buy them back others by pandemics and recessions. some components of the Dow are example, a 3% withdrawal would One company with some resistance to money to live on in retirement, give you $9,000 for the year, while to avoid paying an additional trans- ejected to make room for new ones. action fee. Lessons learned: Pay both is pharmacy chain CVS Health The latest move replaces ExxonMo- but we also have to figure out withdrawing 5% would deliver (NYSE: CVS). Yes, the COVID-19 how much we can withdraw from attention when submitting orders — bil, Pfizer and Raytheon Technolo- $15,000. and price is what you pay, value is pandemic has reduced foot traffic in gies with Amgen, Honeywell and our nest eggs each year without Be sure to factor Social Security what you get. — S., online its stores and hurt in-store clinic rev- Salesforce. These changes reduce ­depleting them too quickly. income into your retirement plan, and enue. But the pandemic is not likely It’s a tough problem, and there’s The Fool Responds: Shopify, the index’s exposure to energy and read up on how to maximize those to be a long-term issue, and CVS no one-size-fits-all solution. Many which offers a widely used has responded nimbly. Indeed, it was traditional pharmaceutical compa- benefits. Consider working a few e-commerce platform, has been look to the “4% rule,” which suggests recently operating more than 1,800 nies, while increasing representation more years, to save and invest even on quite a tear in the past few you withdraw 4% of your nest egg in more, and look into immediate annui- COVID-19 testing sites nationally — of technology and biotechnology. years. It began 2016 at around $25 and it’s offering virtual doctor visits your first year of retirement and then ties, too, as they can allow you to In 2018, General Electric was per share, and began the with its MinuteClinic “E-Clinic” adjust that for inflation in subsequent lock in reliable income. next four years at around shown the door to make way for program. years. That assumes a portfolio mix Many experts recommend being $43, $102, $134 and $404, Walgreens Boots Alliance, while One of the steadiest tailwinds for of stocks and bonds, and it’s likely flexible with withdrawal rates: When respectively. It has recently Apple replaced AT&T in the index CVS Health is that America’s popu- (though not guaranteed) to make your the economy is booming, withdraw been trading around $900 per in 2015. The last major shakeup lation is aging. As life expectancies money last for 30 years. more. When it’s struggling, withdraw share. Clearly, in retrospect, it lengthen and baby boomers hit retire- occurred in 2013, when Alcoa, was a blunder not to buy (and Another approach, suggested less. This is especially true in the ment, reliance on prescription medi- Bank of America and Hewlett- hold) more shares at $38. But at by the 1998 “Trinity study” on early years of your retirement: A big cines to improve overall quality of Packard departed, making room for the time, you didn’t know just retirement savings, is to withdraw stock market crash early on can lead life should increase. Since pharmacy Goldman Sachs, Nike and Visa. how much it would soar. Then, between 3% and 4% each year from to your money running out sooner. sales generate about three-quarters of *** as now, you could have asked CVS revenue, an aging population a stocks-and-bonds portfolio to make This is complicated stuff, so read yourself questions such as: Is this What’s deflation? — L.U., your money last for 15 to 30 years. with easy access to prescription medi- Q a lot more about it — and con- a high-quality, healthy company, cines is a good thing. Federal Way, Washington Examining stocks and bonds from sult a financial adviser. You can with little debt and great growth What’s more, CVS Health has been We all know about inflation, 1926 through 1995, the researchers find ­fee-only advisers near you at ­prospects? Is it attractively priced, pushing the personalized medicine which is the steady rise of found that having bonds makes a NAPFA.org. not overvalued? narrative at many of its locations. The A Opinions are mixed on the prices over time. As you might have company has plans to open around stock’s value these days, as it has 1,500 of its HealthHUB clinics suspected, deflation is when prices run up so much. Bulls expect it to fall. That might seem like purely a around the country by the end of next Name That Company keep growing and rising, but bears year, offering services that include good thing, because falling prices think it’s overvalued and might I trace my roots back management of chronic conditions mean you can buy more with pull back. Note that many big bro- like diabetes. your income. to Japan in 1889, when a kerages now offer commission-free With a recent forward-looking Deflation isn’t always good, trading — which could keep you price-to-earnings (P/E) ratio in the young man founded a com- from making future investment though, as it often accompanies a pany to make and sell playing single digits, and a dividend yield recession and/or a struggling econ- decisions based on transaction topping 3.3%, CVS Health deserves omy. It can be part of a cycle where cards. I expanded into other fees. You can learn more about consideration for long-term portfolios. games in the 1960s, electronic good brokerages at our sister site, (The Motley Fool has recommended many people are out of work: They TheAscent.com. postpone purchases because they’ve arcade games in the 1970s — CVS Health.) lost income, then companies lower and home video games in the LAST WEEK’S TRIVIA ANSWER production due to reduced demand, 1970s, as well. In 1989, I introduced then even more people lose jobs. In I trace my roots back to 1846, when two brothers-in-law started a deflationary spiral, the economy one of the first portable handheld packaging baking soda in a kitchen to sell to businesses. (I’m currently game consoles — named for young America’s leading maker of it.) I began using recycled paperboard for contracts rather than grows. Mean- packaging way back in 1907. Today, based in Ewing, New Jersey, I’m a while, businesses (and people) earn- men. That was followed by systems consumer products powerhouse, encompassing brands such as Arm & ing less money can have trouble such as Wii and Switch. My American Hammer, Trojan, OxiClean, Spinbrush, First Response, Nair, Orajel, XTRA, paying down their debts. Kaboom, Orange GLO, L’il Critters, Vitafusion, Batiste, Arrid, WaterPik subsidiary launched in 1980. Shortly and Flawless. I recently sported a market value of around $23 billion, Deflation can be countered by afterward, I introduced two Italian plumb- lowering interest rates, but rates can rake in more than $4 billion annually, and employ almost 5,000 people. Who am I? (Answer: Church & Dwight) only fall so far. ers to the world. I’ve sold more than 750 million game consoles worldwide. Who am I? Want to Invest? Email us at [email protected], and we’ll send Want more information about stocks? you some tips to start investing. Sorry, we can’t provide individual­ Send us an email to [email protected]. Think you know the answer? We’ll announce it in next week’s edition. financial advice. © 2020 The Motley Fool/Dist. by Andrews McMeel Syndication 9/24