fmdog44
Well-known Member
- Location
- Houston, Texas
Old advice: Invest a set percentage of your portfolio in stocks, no matter what New advice: Consider your risk capacity
Years ago, investors were told to invest a set percentage of their portfolio (usually 100 minus their age) into stocks and the rest in bonds. This means a 60-year-old would invest 40% of their portfolio in stocks and the rest in bonds, then tweak the amounts each year as they move toward retirement age. Taylor Schulte, financial advisor and host of the Stay Wealthy Retirement Podcast, says this advice could do more harm than good in today's environment. People planning for retirement have to consider more than just their age when investing their money. In addition to risk tolerance, Schulte says they should consider their "risk capacity" - or the amount of risk a person needs to take to reach their goals. On the flip side, "maybe someone has been such a great saver that they don't need to own stocks at all," he says. The bottom line: There's no one-size-fits all strategy that works for everyone.
Years ago, investors were told to invest a set percentage of their portfolio (usually 100 minus their age) into stocks and the rest in bonds. This means a 60-year-old would invest 40% of their portfolio in stocks and the rest in bonds, then tweak the amounts each year as they move toward retirement age. Taylor Schulte, financial advisor and host of the Stay Wealthy Retirement Podcast, says this advice could do more harm than good in today's environment. People planning for retirement have to consider more than just their age when investing their money. In addition to risk tolerance, Schulte says they should consider their "risk capacity" - or the amount of risk a person needs to take to reach their goals. On the flip side, "maybe someone has been such a great saver that they don't need to own stocks at all," he says. The bottom line: There's no one-size-fits all strategy that works for everyone.