Spring Training: What Kind of Shape is Your Portfolio In?

Every investment portfolio or retirement plan should have its own detailed structure and goals. Whether you are a young adult who is looking to grow your portfolio for retirement or an experienced investor who wants to simply hold on to what they have accumulated, there should be an individualized approach to your portfolio that is shaped around your needs. Here, the experienced wealth planners at Fiduciam Wealth Planning outline typical investment strategies and considerations for people at different stages in their lives. 

Young Investors – Higher Risk

It’s never too early to start planning for your retirement. By investing your money in your 20’s, you have a large advantage over someone who waits until later in life to invest their money. This is because of compound interest that is accrued over the years, which is why money invested in your 20’s has the greatest growth potential. 

In general, a young investor can also afford to take more risks with their money. After you graduate from college, you may be in debt or have very little savings to start investing with. This means you have less money at risk and any money you may lose can be recouped quickly over the next several months at work or through other investments. Conversely, someone who has a larger portfolio has a lot more at stake and should be a little more careful with their investments.

Regardless of what strategy you move forward with, it’s a good idea to start investing early. Whether it’s in a company-matched 401(k) or an IRA account that you’ve set up independently, invest what you can while you are young.

Middle Age – Neutral Risk

As you get older and become more career-focused, it becomes increasingly important for you to start putting money away. You’ve likely started to accumulate financial commitments such as dependents and mortgages, but you are also more likely to have a stable income and some savings to work with. Even with these increased expenses, contributing to your retirement should be a top priority. Take full advantage of your company’s 401(k) and consider maxing out any other IRA’s you may have as well. 

Overall, you can still afford some risks during this period but it is a good idea to start limiting risks and start fluctuating with the markets and economy. Shift your focus less on volatile stocks and more on low risk options such as index funds.

Ages 50 and Up – Low Risk

Even if you’ve been saving and investing for years, it does not mean you should lose sight of the goals you set in your retirement plan. Stay focused and start to consider what age you would like to retire. As a general tip, the closer you get to retirement, the more conservative you want to be with your investments. Adjusting your investment strategy to more stable, low-earning funds is a good choice if you don’t want to risk your hard-earned money. The guidance of a wealth planning professional in this case can help you feel more secure in your last-minute retirement decisions. 

Get in Touch With the Investment Planners at Fiduciam Wealth Planning

Regardless of what stage of life you are in, you ultimately have the freedom to invest your money how you want to. However, it’s important to consider your needs and how they should shape the way you manage your portfolio. For more information, contact the experienced wealth management and retirement planning professionals at Fiduciam Wealth Planning here.