Change Investment Strategies As You Age

We all know the importance of investing in your future. Not only is it necessary to invest money today for the needs of tomorrow, you must also consider how soon “tomorrow” will come. Changing your investment strategy is not something you should take lightly and in most cases long term investments are just that…long term. As you get older however you need to ensure you are not risking your retirement money at a time when you can least afford to lose it. Most investors have their own strategy based on experience, comfort level and personal preferences, however the following strategies are a good guideline for all investors.

• The 35 and under crowd- Perhaps it is appropriate that at this age we are all more inclined to take risks as this is the time when you can afford to take an aggressive stance with investments. With many years ahead to make up for possible losses, this is the age group that should consider higher risk investments in order to reap the higher returns. This does not mean you should take unreasonable risks, rather understand that if there is period in your life where you can “afford” to take chances in the stock market, that time is now.

• Stabilize in mid-life (36-55)- This age group is not necessarily knocking on retirement home doors, however it is a time when you should consider reining in your investments to create a growing yet less risky portfolio.

• Slow things down after 55- With retirement only a few years away, people in this age group do not want to risk losing their money in risky investments. This is a period of time where your accumulated savings should positioned toward income and growth opportunities.

• You’ve finally made it- A lifetime of hard work and life experience has brought you to the well deserved retirement years. Your money should now be protected to avoid loss as you now rely on your investments to sustain you income needs for the remainder of your life. Your money should now be placed where it is guaranteed to earn interest with no risk of loss.

It is your choice how you choose to invest your money as you age. Like so many things in life, investment results vary from person to person and will certainly play a role in how you choose to invest in the future. This guideline simply shows the recommended course of action that offers most people the opportunity to grow their money while avoiding loss later in life.