During periods of uncertainty such as political change, geopolitical conflict or increased market volatility, it can be hard to remain focused on the big picture, especially if you are planning to retire in a few years. While Sir Isaac Newton didn’t have the stock market in mind while formulating the laws of motion: that what goes up, must come down, history has proven it is true for the financial markets as well. I like to remind clients nearing retirement that they need income throughout retirement, not access to their entire portfolio the day they retire.
Your portfolio will need to keep working for you for another 20 years or more generating income to outpace the rising cost of living and healthcare expenses. Equity investments are the engine that fuels potential growth over time. For investors with long-term goals, a well-diversified portfolio allocated across different asset classes can not only help reduce the risk of a downturn in any one investment, but help produce needed growth to supplement retirement income.
While it is true that understanding how factors like economic data may impact the markets can help you invest more strategically, knowing how to diversify your investment portfolio may play an even more critical role in weathering changing market conditions. Managing your exposure to risk through an asset allocation aligned with your goals and risk tolerance eliminates the need to focus on day-to-day market fluctuations over the long term.
About the author: Scott Jones, CRPC®, RFC®, Founder & Financial Advisor with Genesis Wealth Advisor Group, LLC. Genesis has offices in Mount Laurel, NJ and Dunedin, FL, focusing on retirement, multi-generational wealth and estate planning. Learn more at: www.genesisadvisorgroup.com.
Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results.
As published in The Cherry Hill Sun, Haddonfield Sun, Marlton Sun, Medford Sun, Mt. Laurel Sun, Shamong Sun, Tablernacle Sun, Voorhees Sun, and Washington Twp. Sun Newspapers.