The article suggests buying a target-date fund or a balanced fund to avoid the risks of a big mistake late in the game, but people often choose a different course. Many see their significant balances and figure, “Wow, if that’s what happened from my not paying attention, imagine what I could do by choosing my own investments!” And they do. This is sometimes called the “yard sale” portfolio with a little of this, a little of that-there is no logic to many of the investments, no rebalancing, no asset allocation – just a lot of investments in one account.

Locking in losses is the last blunder.As the portfolio balance falls older, independent investors see things getting worse and worse. When the stock market finally bottoms-and it cannot get any worse-the investor sells, locking in losses they cannot possible recover.

The Forbes article suggests owning a real portfolio that includes a variety of investments and hang on to them without emotion through all the ups and downs. Hedging against volatility as you age can help reduce the risk of an emotional blunder that will prove a costly mistake in your retirement planning.

For more information, please visit my estate planning website.

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.
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