New Thoughts on Investment Strategies
On: 10th November, 2015 // By: admin
Here’s What You Need to Know For Retirement, Based on What we Know, Now
Activity in the stock market over the last decade has turned some traditional retirement planning advice on its head. If you were on the brink of retirement in 2008, with heavy investment in the stock market, chances are you may have lost a large portion of your wealth and you’re either still working or newly retired now. As a result of watching these events unfold, many advisors are focusing on new investment strategies.
Some of the new ideas gaining traction in retirement planning focus more on how the market behaves and the intricacies of how that can impact your personal portfolio and your investment strategies.
With traditional retirement planning focusing more on a general “buy and hold” mentality, investment advisors are now using that same advice, but adding some qualifiers. For instance, if you are 25 years old, buy and hold makes sense because when you get to the end of a 15-year period, you still have many years left to regain any losses. However, a 55-year-old investor that buys should keep a close eye on investments, because a buy-and-hold strategy could quickly deplete wealth in a volatile market, leaving little time before retirement to regain the wealth.
If you are over the age of 45, you can no longer afford to simply wait out the next five years to see what happens to your struggling portfolio. It is important to consider the market of the last few years and determine how to best protect your wealth so that you can maintain your retirement timeline with your security intact.
The four-step approach encouraged by Market Watch offers some ideas that you might consider if you are concerned about the state of your wealth protection in the next three to five years:
Think protection. You need to build up your defenses for your portfolio. You can do this by increasing your stores of cash, through hedging techniques or a combination of both strategies.
Look at individual investments. Evaluate your portfolio, looking for “weak hands.” These are investments that are lower quality or tend to be overvalued on a long-term basis, and they need to be sold.
Keep an eye on the stocks you like. Think about the investments you would like to own, but that tend to be too pricey. These are the businesses you would like to be involved in, but the price has been too high to make you comfortable. Evaluate individual stocks, looking at either dividend income or price growth potential. You may get a chance to purchase these stocks at a deep discount in a volatile market cycle.
Establish a bracket of time that you are watching. Decide where you would like to be in three to five years, and evaluate your investments based on that period. This helps you position yourself for the next bull market and protect you from the fallout of a bear market.
Aura Wealth Advisors provides investment strategies that take into account not only market conditions and the number of years before you plan to retire, but also your personal preferences and your hopes and dreams. Make an appointment to talk with one of our wealth advisors and we can determine what steps need to be taken in order to protect and grow your investments.