February 2022 Newsletter

February 28, 2022 Author: Woody Derricks

Investing During Retirement & More!

Tim recently came across an article that discusses how many older investors have more money in stocks than they may realize. While it’s true that many older investors may have more stocks in their portfolio than past generations of retirees, that’s not necessarily a bad thing.

We’re concerned that older investors may have too little exposure to growth assets such as stocks. In our experience, most people are behind the curve in planning and preparing for retirement. This deficit is often due to people underestimating their lifespan, higher levels of inflation, and the future cost of health care. As a result, we think that retirees face a bigger threat of outliving their wealth than they do to the risk of having too much money in stocks.

Another risk that has been largely forgotten over the past 40 years is interest-rate risk on bonds. When interest rates increase (as they are now with the Fed attempting to reduce inflation), the value of bonds typically goes down. Although many have recommended that retirees move to a portfolio of 60% stocks and 40% bonds to limit the risks associated with owning stocks, we’re now seeing the potential hazards of that recommendation. With the stock market declining and interest rates on the rise, the 60/40 portfolio had its worst return in January since March 2020.

We’d rather not see people scared out of stocks as they age based on arbitrary rules of thumb. Keep in mind that everyone is different, so we recommend that each investor has a plan tailored to them. Consider reviewing your investment mix so you know what you own, take your risk temperature, and measure your projected returns versus the targeted returns for your goals.

Questions and Consultations

If you have questions or if you’d like to schedule an appointment to discuss your finances, contact us today.

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.

As a Registered Investment Advisor (RIA), Partnership Wealth Management is committed to providing our clients with financial planning and wealth management services to help them work towards their financial goals. At Partnership Wealth Management, we have a long history of working with the LGBTQ community. Among the many services we offer are financial planning and estate planning strategies for gay and lesbian couples. Financial planning is an important part of preparing for the future; contact us today to get started.

Investment advisory services are offered by Partnership Wealth Management, a Securities and Exchange Commission Registered Investment Advisor. The commentary presented herein contains the opinions of the firm, and this information should not be relied upon for tax purposes and is based upon sources believed to be reliable. No guarantee is made to the completeness or accuracy of this information. Partnership Wealth Management shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses, or opinions contained herein or their use, which do not constitute investment advice, are provided as of the date written, are provided solely for informational purposes, and therefore are not an offer to buy or sell a security. Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. This information has not been tailored to suit any individual.