Investing While Retired

There are specific principles or keys to investing if you are retired.  Yes, there are many books on the subject and new magazine articles on this topic come out almost every month, but somehow their content seems to either miss the key factors or the explanations are so long and convoluted that the key points are glossed over.

This reminds me of when I go hiking in Glacier National Park.  I want to know things like:

What are the key characteristics of the trail?

What are the viewing highlights along the trail and at the final destination?

What is the weather forecast?

What animals can I expect to see?

Have there been bear sightings recently?

Because I’m not a scientist, I don’t want a mile by mile description of the flora or fauna along the trail. I don’t need the names of every flower, plant, or tree – but yes, I do want to know a little about the really unique specimens along the way, but don’t point out every darn posy.  It’s the same with managing your retirement funds.  Concentrate on the key factors and then follow your investment trail map to success for investing while retired.

As a retiree, your keys to successful money management are:

Managing your investments – should you do it yourself, or use a professional advisor/planner?  This is a key characteristics of your trail.  Do you have time to manage it yourself – as much as 30 minutes or more a week? If you are going to self-manage your retirement account what personal investment software program will you use?

ETFs, mutual funds, or stocks – These are your investing viewing highlights.  Do you know how to classify or divide stocks, ETFs, or mutual funds into working groups, or do you have ready access to advice on the matter?

Staying Unemotional – Can you check your emotions at the door in order to make unbiased decisions?  Do market drops scare you-like getting caught in a lightning storm-or can you shrug them off and stay steady on your investment trail?  The answers to these questions are part of your ongoing weather forecast.

Another consideration that some people have difficulty thinking about is, “What is your life expectancy?  You need to think this through because your investment diversification needs to be based on your life expectancy if you want to earn and have money for your trip down life’s trail.  Being too conservative with your life expectancy could result in a money shortfall down the road (trail); while being too aggressive may risk your core investments too much – like running out of food on day 3 of 4-day hike.

Staying Focused-Are you easily distracted by news, comments, or suggestions from friends and family?  If so, this could influence you to buy or sell when your investment program or investment advisor makes a different recommendation.  “Animal sightings” along the trail can be totally captivating, but at the same time, they can distract you and make you lose your way.

The Right Strategy-Do your strategies allow for signals that tell you when to take safe cover, e.g., when there is a major market drop.  Seeing grizzly bears in the wild can be awesome, but hopefully you are seeing them from a distance.  If you get too close, grizzly bears pose a serious risk.  But with bear spray in hand and knowledge about how to react to a charging bear you’ll at least increase your chances for survival.  You need the same kind of safety plans for investing. Good advisors and good personal investment software programs always take safety into account.

Dominick is the designer of the investment program Dynamic Investor Pro, an investment software used by individual investors and professional investment advisors for stocks, ETFs or mutual funds.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright 2016 Investment Solutions LLC, Invest Profitably Tips – Privacy PolicyDisclaimerTerms of Use