April 2021: Invest appropriate for your age
The stock market is one of the best ways to build wealth in a relatively short period of time, but it’s important to invest wisely. If you invest too aggressively, your investments could potentially take a nosedive if there’s a market downturn. Alternatively, if you invest too conservatively, you may not be able to save enough for the retirement you want.
Typically, the closer you get to retirement, the more conservative your portfolio should be. When you’re young and still have several decades before retirement, you can afford to invest more in equities because you have plenty of time to recover from market downturns. As you get older, your investments should shift toward the more conservative side. You won’t see as much growth, but your portfolio will also be more protected against stock market crashes that you may not have sufficient time to recover from, especially when you start drawing income from your portfolio.
Your objectives, risk tolerance, time horizon and past experience also play into what the right asset allocation and investment selection makes sense for your personal situation.
Be sure to get professional advice to ensure your portfolio is on the right track to achieve the outcome you want.
