Explore the Odds of
This informational chart shows historical returns of the stock market, specifically the S&P 500, by year from 1926 through 2012. Request this powerful chart to understanding how often the market goes up and down and how you can better position your assets during your retirement years.
Determining the right asset mix is an important part of planning and investing in your future. Your age and life situation can play a large role in the choices you need to make. When it comes to investments a one-size-fits-all approach doesn’t necessarily work. Asking yourself a few questions can help to determine how to make the right investment choices:
- What age are you?
Your attitude can change with age. Longer term or higher risk investment options may be more attractive to younger investors where someone approaching retirement may want to lower their risk as retirement approaches. We all have different reasons for saving, and the purpose of your investment can affect how much risk you are will to take with your money.
- What is your personal life situation?
If you’re a parent with dependent children you may be more cautious about saving compared to an individual without any dependents. If you are self-employed you may need products that are more flexible to suit an erratic income pattern. Take a close look at your personal life situation and what flexibility you may need.
- How much flexibility will you need?
When money is tied up in investments it’s no longer available to you. Will you have a sudden need for cash and therefore need to liquidate your assets? If you answered yes, it will be an important factor to know what the penalties and tax implications will be when getting out of an investment.
- Do you need income from your investments?
If you will need regular income from your investment this will determine the best investment vehicle for you. There are many options to choose from that can provide regular income in your retirement years. Many investment products run for a fixed period of time so having a date in mind when you need to access your investments will help determine the level of risk you are comfortable with.
- Have you reviewed your portfolio recently?
With recent market fluctuations it may be painful to look at your portfolio in depth, but make sure you look at the performance of each investment. Some key factors to analyze:
- Asset Allocation – Are your investments divided between various holdings that could affect your returns and risks? Wise choices when allocating your assets should properly reflect your timeline and risk tolerance.
- Equity Diversification – Are your assets diversified to reduce the potential impact of one poorly performing investment?