Don’t get too excited. I am not suggesting that you become imprudent in your investing. I think you should take a small percentage of your retirement investing capital and look at alternative ways to invest.
Consider taking five to ten percent of your investing capital and try something different.
Why do something different?
If you are over fifty years of age, you have been advised to adjust your portfolio and your savings rate because retirement is not too many years in the future. Some of the investments you made when you were younger just would be too risky now.
Calculate your retirement income needs
Unfortunately, the vast majority of people in this age range, and older, don’t have enough capital accumulated to finance their cash needs during retirement. Here is a retirement calculator. Don’t take my word for it.
Re-balance your investment portfolio
Current advice is to re-balance your portfolio away from stocks and more in the direction of the less risky bonds as you start nearing retirement. Bonds will also provide you with current income in retirement.
However, eliminating stocks is unwise because of inflation. Inflation reduces the dollar over time, as I am sure you know. Currently, we are experiencing tremendous inflation in the commodities markets. The main stream media doesn’t talk about inflation, but if you watch the market, you know. Your investments must grow at least as fast as inflation just to remain even. Bonds will not give you the appreciation that you need to beat inflation.
So, what is the average investor to do?
Take a portion of you investment portfolio and invest it using a market timer. How much of your portfolio? Ask your financial adviser to help you make this determination. A good market timing system will reduce your emotional misreads of the market. Take a look at the timer’s actual performance reports and trade with one that has a good performance record.
