{"id":7099,"date":"2013-10-25T12:06:18","date_gmt":"2013-10-25T19:06:18","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7099"},"modified":"2016-12-21T07:28:20","modified_gmt":"2016-12-21T15:28:20","slug":"how-to-invest-for-life","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/how-to-invest-for-life\/","title":{"rendered":"How To Invest For The Rest Of Your Life"},"content":{"rendered":"

Often, financial writers tell us how to invest for a given age: How to invest now that you’re 40, or how to invest as you enter retirement.<\/p>\n

It’s not a bad idea. We’ve done it a few times ourselves.<\/p>\n

But consider what these approaches have in common: You have to invest in something, since cash is subject to\u00a0inflation<\/a>. And you must have a plan, some kind of standard to measure against.<\/p>\n

\"how<\/a><\/p>\n

Otherwise, your investments can be overwhelmed by disorder and chance. A lot of people’s portfolios look like the proverbial yard sale: Stock that once were hot, a bond past its prime, that biotech expected to turn the industry on its ear. Now it trades for pennies, so why sell?<\/p>\n

It’s hard work, coming up with how to invest consistently. Thankfully, there’s a fair amount of really good research on the topic.<\/p>\n

Here’s the simple breakdown:<\/p>\n

1. You should own stocks<\/strong><\/p>\n

<\/strong>Stocks<\/a>\u00a0simply perform better than most other assets. They’re also more volatile, so it’s important to maintain a balance between stocks and non-equity investments, such as\u00a0bonds<\/a>\u00a0and real estate.<\/p>\n

2. Income matters<\/strong><\/p>\n

<\/strong>An important part of your portfolio is “total return,” that is, the income value of a position plus price appreciation. You get income from\u00a0dividend stocks<\/a>, bonds and investments such as\u00a0real estate investment trusts<\/a>.<\/p>\n

3. Avoid trading<\/strong><\/p>\n

<\/strong>That’s doesn’t mean buy a blue-chip stock\u00a0and hold it until retirement. It does mean staying in the market until the market gives you a reason to cash out. This is best accomplished by owning a portfolio of asset classes and selling gainers to buy losers through simple,\u00a0periodic rebalancing<\/a>.<\/p>\n

4. Watch your costs<\/strong><\/p>\n

<\/strong>The biggest risk you face is losing money to\u00a0mutual fund fees<\/a>\u00a0and commissions. Brokers and mutual funds will literally suck your portfolio dry if you aren’t careful. It’s better to own inexpensive\u00a0index funds<\/a>\u00a0and\u00a0ETFs<\/a>\u00a0over pricey actively managed products.<\/p>\n

5. Adjust as you age<\/strong><\/p>\n

<\/strong>Remember when I said to own stocks? Well, you should, but the size of that position should decline as you get closer to retirement. The big problem for many investors in 2008 was owning far too many volatile investments so close to quitting work. For younger folks, a stock crash is essentially meaningless. The rest of us should look to\u00a0lower risk<\/a>.<\/p>\n

Can you invest this way the rest of your life? Of course. Anybody can. It’s not a zero-maintenance approach, but it is a very low-fuss way of achieving the goal everyone wants, to\u00a0grow money prudently<\/a>\u00a0in order to enjoy it in our old age, worry free.<\/p>\n","protected":false},"excerpt":{"rendered":"

Often, financial writers tell us how to invest for a given age: How to invest now that you’re 40, or how to invest as you enter retirement. It’s not a … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7101,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[8],"tags":[],"yoast_head":"\nHow To Invest For The Rest Of Your Life | MarketRiders<\/title>\n<meta name=\"description\" content=\"Often, writers tell how to invest for a given age: How to invest now that you're 40, or how to invest in retirement. 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