Greetings! I hope that this finds you well and in good spirits.
Well here we are once again facing some potentially big economic uncertainty with the strong possibility of government shutdown because of budgeting issues in Washington. It’s beginning to feel eerily familiar isn’t it! How do you manage the emotions that accompany the uncertainty as a retiree or a person approaching retirement and the reality that you are at a point in life, when you have to depend on your savings to sustain your life style? That’s a loaded question and the complete answer covers a lot of information more detailed than can be covered in this writing. But to sum it up the answer is to manage your money at all times based on who you are. Profile your portfolio based on your personal investor profile. That will vary a lot based on the individual but some fundamentals are:
– Have sufficient assets structured to provide for day to day needs to meet expected cash flow requirements.
– Maintain a comfortable balance in stable, fixed rate bank type assets for needs that occur above and beyond day to day expected expenses.
– On the money earmarked for longer term growth, take on risk / volatility only to a level that matches your personal comfort level.
– Never invest in anything that you don’t fully understand.
There are others issues to consider as you invest, but considering these are a great place to start the process of managing assets in retirements. You can see that these fundamentals are personal in nature and vary greatly based on the needs and desires of individuals, however they are all useful in clearly defining the profile and identity of an investor. Following the discipline of them will go a long way in dealing with the emotions of economic uncertainty.
Best regards and make it a great week!