Investment Updates
Five Ways To Plan Smarter And For The Long Haul
Published Thursday, December 19, 2013 at: 7:00 AM EST
Maybe you’re in the homestretch before retirement or perhaps you’ve already stopped working. If you’ve been diligent in setting aside funds to sustain you through your golden years, congratulations are in order, but you can’t rest on your laurels. As life expectancies continue to increase, it’s more important than ever to address concerns that you might outlast your money. As the rebound in the economy and stocks has demonstrated, you need to take steps to plan for the long haul and stick with that plan through downturns. Although there are no guarantees when it comes to investing, consider these five suggestions for planning for the long term:
1. Be able to ride out stock market downturns. Even if investing in equities helped get you where you are today, you may decide that the inherent volatility of the stock market means you should get out of it altogether during retirement. That might not be the best approach.
Instead, try to stay on a path for sustained growth that factors in your personal tolerance for risk. For instance, a conservative investor embarking on retirement might allocate 30% of a portfolio to equities and 70% to fixed-income investments. A more aggressive investor likely would choose a higher percentage—perhaps 40% or 50%—to keep in stocks. But the important thing is to find a balance between risk and reward that helps you meet your goals and that won’t send you fleeing from stocks when they decline sharply.
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