Up and Coming Weekly is a weekly publication in Fayetteville, NC and Fort Bragg, NC area offering local news, views, arts, entertainment and community event and business information.
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SEPTEMBER 10-16, 2014 UCW 13 WWW.UPANDCOMINGWEEKLY.COM As an investor, you're well aware that, over the short term, the financial mar- kets always move up and down. During your working years, you may feel that you have time to overcome this volatility. And you would be basing these feelings on actual evidence. The longer the investment period, the greater the tendency of the markets to "smooth out" their performance. But what happens when you retire? Won't you be more susceptible to market movements? You may not be as vulnerable as you think. In the first place, given our growing awareness of healthier lifestyles, you could easily spend two, or even three, decades in retirement — so your investment time frame isn't necessarily going to be that compressed. Nonetheless, it's still true that time may well be a more important consideration to you dur- ing your retirement years, so you may want to be particularly vigilant about taking steps to help smooth out the effects of market volatility. Toward that end, here are a few suggestions: • Allocate your investments among a variety of asset classes. Of course, proper asset allocation is a good investment move at any age, but when you're retired, you want to be especially careful that you don't "over-concentrate" your investment dollars among just a few assets. Spreading your money among a range of vehicles — stocks, bonds, certificates of deposit, government securities and so on —can help you avoid taking the full brunt of a downturn that may primarily hit just one type of investment. (Keep in mind, though, that while diversification can help reduce the effects of volatility, it can't assure a profit or protect against loss.) • Choose investments that have demonstrated solid performance across many market cycles. As you've probably heard, "past performance is no guar- antee of future results," and this is true. Nonetheless, you can help improve your outlook by owning quality investments. So when investing in stocks, choose those that have ac- tual earnings and a track record of earnings growth. If you invest in fixed-income vehicles, pick those that are considered "investment grade." • Don't make emotional decisions. At various times during your retirement, you will, in all likelihood, witness some sharp drops in the market. Try to avoid overreacting to these downturns, which will probably just be normal market "corrections." If you can keep your emotions out of investing, you will be less likely to make moves such as selling quality investments merely because their price is temporarily down. • Don't try to "time" the market. You may be tempt- ed to "take advantage" of volatility by looking for op- portunities to "buy low and sell high." In theory, this is a fine idea — but, unfortunately, no one can really predict market highs or lows. You'll probably be better off by consistently in- vesting the same amount of money into the same investments. Over time, this method of investing may result in lower per-share costs. However, as is the case with diversification, this type of "systematic" investing won't guarantee a profit or protect against loss, and you'll need to be willing to keep investing when share prices are declining. It's probably natural to get somewhat more apprehensive about market volatility during your retirement years. But taking the steps described above can help you navigate the sometimes-choppy waters of the financial world. The only thing missing is You! Book Your Holiday Party gatesfour.com • 425-6667 x235 Protect Your Retirement Against Market Volatility by STEVE McDAVID STEVE McDAVID, Contributing Writer, COMMENTS? Editor@upand- comingweekly.com. October 4, 2014 8 a.m. to 5 p.m. Firearm & Tactical Supply Vendors Public Safety Displays Zombie Airsoft House & Bounce Houses For Kids And More Food and Fun... Tickets: $7 Adults, Under 10 Free 910.208.4383 • TheRangeComplex.com Benefits tactical officers wounded or killed in the line of duty.