Fifty means the first serious thought about retirement. Even the few years that remain until retirement, money can be invested.
At the very beginning of investing at the age of 50 plus, an important principle must be taken into account. Don’t invest all your savings so far. It is very easy to succumb to the pleasing graphs that advisors and bankers present to their clients. In addition, all graphs are based on the past. The future on the capital markets is unpredictable and, if so, very limited. All information about past revenues says nothing about future ones.
Investment horizons and risk profiles
Before you invest money, find out what your risk profile is. If you have no experience with investments yet, you will get a conservative profile in the investment questionnaire. Don’t despair, your profile may change over time. The second option is to skip the result from the questionnaire and invest according to the advisor’s recommendations. However, this eventuality cannot be recommended to everyone.
It is similar with investment horizons. Investment companies that manage mutual funds, which are the most common ports of retail investors’ money, recommend a predetermined investment horizon for each type of fund. The less risky an investment, the shorter the investment horizon.
An equally important factor is the gradual sale of the investment before retirement. A horizon of at least ten years is recommended. This can be reduced by tying up only a small part of the financial assets, such as five to ten percent. Thanks to this measure, you can keep your money in riskier types of funds, such as equity or mixed funds, for a longer period of time. You can sell unit certificates, for example, for several years, when you retired.
Avoid the hasty sale of part or all of the investment, where opposing factors stand against each other. On the one hand, it is necessary to raise money quickly and, on the other hand, a decrease in the value of unit certificates depending on the unfavorable development of the capital markets.
The above procedures aim for one thing only. Help you eliminate some experienced myths and dispel them. You can also invest during your old age. You don’t have to wait for the benefits of investments in the form of returns.