Investment Decisions in a Falling Market
Walter Upgrave provides some solid advice on investment portfolios in today’s unpredictable market. He tells a worried 34 year old investor that 20 and 30 year olds should not be greatly concerned by the falling market. In essence, he points out that individuals within this age range have more than enough time to recover their money and that these investors have a great chance of boosting potential returns by purchasing shares at lower prices.
In short, Upgrave proposes either an 80/20 mix of stocks/bonds or a 90/10 mix depending on your personal aversion to risk. He recommends the 90/10 mix only if you can truly whether the storm of a down market, otherwise you are bound to pull your money out when the market dips. He writes:
If you’re really cautious, you can pare back your stock holdings even more. But you don’t want to wimp out and go much more toward bonds because then you reduce the chances of building a nest egg large enough to support you comfortably in retirement.
The article also discusses investment strategies for those in mid-career, nearing retirement, and even those who have already retired. It’s such a great read I’m forwarding it on to my dad.
You can check out the entire article here.
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