Conventional investing wisdom says that as people age, they should put less of their money into stocks and more into stable investments such as bonds and cash. This is sound advice based on the idea that in retirement you want to protect your assets in case there is a major market downturn, which also happens with games at https://www.stellarspins.live/en/.
But there are still strong arguments to continue investing in stocks even as you get older. Few people recommend an all-stock portfolio, but reducing stock ownership down to zero doesn’t make sense, either.
Why does owning stocks make sense even for older investors? Let’s examine these possible motivations from experts at New Zealand casino online.
You’re going to live a lot longer
If you are thinking about retirement as you approach age 60, it’s important to recognize that you still may have several decades of life remaining. People are routinely living into their 90s or even past 100 these days. Do you have enough savings to last 40 years or more? While it’s important to protect the assets you have, you may find that higher returns from stocks will be needed to accrue the money you need.
You got a late start
If you started investing early and contributed regularly to your retirement accounts over several decades, you may be able to take a conservative investing approach in retirement. But if you began investing late, your portfolio may not have had time to grow enough to fund a comfortable retirement. Continuing to invest in stocks will allow you to expand your savings and reach your target figure. It still makes sense to balance your stocks with more conservative investments, but taking on a little bit more risk in exchange for potentially higher returns may be worth it.
Other investments don’t yield as much as they used to
Moving away from stocks was good advice for older people back when you could get better returns on bonds and bank interest. The 30-year treasury yield right now is about 2.75 per cent. That’s about half what it was a decade ago and a third of the rate from 1990. Interest from cash in the bank or certificates of deposit will generate a measly 1.5 per cent or less. The bottom line is that these returns will barely outpace the rate of inflation and won’t bring you much in the way of useful income.
Some stocks are safer than others
Not all stocks move up and down in the same way. While stocks are generally more volatile than bonds and cash, many have a strong track record of steady returns and relative immunity from market crashes. Take a look at mutual funds comprised of large-cap companies with diversified revenue streams. Consider dividend-producing stocks that don’t move much in terms of share price, but can generate income. To find these investments, search for those that lost less than average during the Great Recession and have a history of low volatility.
Dividend stocks can bring you income
Dividend stocks are not only more stable than many other stock investments, but also they can generate cash flow at a time when you’re not bringing in other income. A good dividend stock can produce a yield of more than 4 per cent, which is more than what you’ll get from many other non-stock investments right now. This will help ensure the growth of your portfolio is at least outpacing inflation.
