If you aspire to a quiet life by the time you retire, you may be interested in the secrets to successful investors.
First of all, when retirement age approaches it is a good idea to check your investments and make sure they are still aligned with your personal situation and your long-term goals.
You may have diversified your investments by spreading them across a stock portfolio, retirement plan or any other type of investment. Whatever your choice was, over time it is important to change them so that they are always consistent with your long-term goals.
This is what you will be able to discover with the help of this guide, along with other secrets for a successful investment.
Fisher points out that in determining the most appropriate asset allocation for your personal circumstances, you will need to take into account your long-term objectives and your time horizon. Asset allocation is the combination of stocks, bonds, cash and other securities, and should not be decided solely on the basis of one’s age or expected retirement date.
Reducing your equity exposure and increasing your bond exposure when retirement age is approaching is often a imprudent choice, which limits the growth possibilities of your portfolio in the long term. It is important to remember that asset allocation will be based on your personal financial goals and on how long your money will last, and this has nothing to do with the age at which you retire.
Moreover, many investors do not know all the risks associated with investing, and often limit themselves to thinking about short-term spikes in volatility. While this is a real risk, if you try to avoid these fluctuations at any cost you can face other dangers, such as running out of money during your retirement period.
To prevent this, Fisher Investments’ guidance and periodic updates recommend that you possibly avoid both excessive investment in bonds and insufficient investments in stocks, thus preventing your portfolio from depreciating over time. Experienced investors with high capital availability know that in the short term shares can be a risky instrument, but unlike other types of investments they can contribute to long-term portfolio growth.
Considering the periods of 20 years starting from 1970, it can be seen that for 85% of the time the returns on shares were higher than those on bonds. In addition, during these time frames, when stock returns outstripped those of bonds they did so with a large edge. When it was the bonds that made higher returns, the difference was more modest.
This guide and periodic updates also indicate that one of the major risks to which portfolios may be exposed is to miss the growth needed to achieve investment objectives when trying to avoid episodes of short-term volatility.
Investing in stocks is not easy, and choosing how to manage income in retirement age is important decision and possibly difficult, which will depend on your tax situation, the time horizon of your investment, future expenses planned and other sources of income.
Investing in financial markets carries the risk of loss and there is no guarantee that the capital invested, in whole or in part, will be repaid. Past performance is neither a guarantee nor a reliable indicator of future performance. The value of investments and their returns are subject to fluctuations in world stock markets and international exchange rates.
This article is provided for informational purposes only and does not constitute promotional or informational material relating to Fisher Asset Management, LLC; Fisher Investments Europe Limited; Fisher Investments Ireland Limited; Fisher Investments Luxembourg, Sàrl; or Fisher Investments Australasia, Pty Ltd (collectively, the "Fisher Group").
It reflects the author’s general views and should not be considered as personalized investment or tax advice, nor as a reflection of the performance of the Fisher Group or its clients.
It is not possible to guarantee that the author will maintain these opinions, which may change at any time based on new information, analysis or reconsideration. There are no guarantees regarding the accuracy of the forecasts contained therein.
Original article published on Money.it Italy 2022-10-21 09:00:00.
Original title: Sette segreti utili per investitori con elevata disponibilità patrimoniale
