How Do I Choose the Right Investment Mix?

investment mixChoosing the right investment mix is very important and fluid. When you are in your twenties or thirties, most financial advisors will suggest investment options with more volatility – larger gains coupled with possible larger losses. At that stage of your life it is assumed you have the time to recover from investment losses. As you age, your investments should move to less aggressive choices. There are matrixes experienced advisors use to help their clients change strategies. An experienced financial advisor is a must. Some will charge a small fee to give advice and manage your account while others receive their remuneration only from commissions. It is important when interviewing an advisor to ask how they are paid. Most major mutual fund families also have developed “timed” funds meaning they automatically adjust the aggressiveness downward as you get closer to your retirement age. During the final five to ten years, these funds move to investments designed to protect your nestegg.

There is an old adage – subtract your age from 100 and the answer is the percentage of your investments which should be in volatile investments. This is not a rocket science but gives a person an idea.

Self-Directed Accounts – these add a new wrinkle or dimension. Self Directed Accounts can still invest in traditional choices – think stocks, bonds, mutual funds etc. However now the alternative investment world comes into play e.g. real estate, tax liens, precious metals, deeds of trust etc. This can be wonderful or scary. As with traditional assets, one must do their homework and assess their personal risk tolerance and time frames. You are self-directed so you are the responsible person.

Please contact us and we will be more than happy to go into much more detail.

Comments are closed.