Investment Advice: For Retirement

Look after the pennies and the pounds will look after themselvesMichael Lewis wrote a good post on the MoneyCrashers blog about what people who are close to retirement should be looking at for investments. Lewis says:

With age comes wisdom – or, at least, so those of us who are approaching the age of retirement hope. For many people, wisdom includes the recognition that prices of assets can go down as well as up, especially in the short-term. In addition, experience shows that markets do not always reflect underlying values, driven in the short-term more by emotion and psychology than by logic. History is full of companies who have gone public and enjoyed soaring stock prices, only to go bankrupt in the harsh light of economic reality. 

When your targeted retirement is three or four decades in the future, losing significant capital on a high risk investment can be overcome. However, as retirement draws closer, investment periods – the time between making an investment and needing proceeds for living expenses – shrink, increasing the possibility that a loss of capital may never be recovered…. 

Read the rest here…

So if you are within a few years of retirement this article is worth your time to read. If you are young consider telling your parents or grandparents about it. Lewis explains some things about some popular investment vehicles including:



Mutual Funds

Exchange Traded Funds (ETF)

Real Estate Investment Trusts (REITs)

Master Limited Partnership

Check it out and let us know what you think.

Wishing you well,

Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.