{"id":7478,"date":"2014-03-07T11:59:07","date_gmt":"2014-03-07T19:59:07","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7478"},"modified":"2016-12-21T07:28:09","modified_gmt":"2016-12-21T15:28:09","slug":"retirement-plan-market","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/retirement-plan-market\/","title":{"rendered":"A Retirement Plan for Any Market"},"content":{"rendered":"

The biggest risk you face as a\u00a0retirement investor<\/a>? It probably isn’t the stock market or even the economy. It’s you.<\/p>\n

Emotions are a major risk factor for any serious long-term investor, and it cuts both ways. When things are going great, we tend to want to buy, buy, buy. Yet that ensures we buy more when asset prices are high, and probably too high.<\/p>\n

When things are going badly, we react and want to sell, sell, sell. Often, investors hang on to falling investments until they can no longer bear the pain. Then they sell \u2014\u00a0right at the market bottom<\/a>.<\/p>\n

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

We know that the stock market will rise and fall in value. That’s a given. So it’s important to try to control instead your own emotional reactions to that simple fact.<\/p>\n

Here’s how to\u00a0build a retirement plan that will work<\/a>\u00a0for you in any market, up or down:<\/p>\n

1. Own markets, not stocks<\/strong><\/p>\n

The more you buy individual holdings, the more closely you will scrutinize them. That’s unhealthy and feeds your need to “do something” about a single investment. Instead, own\u00a0broad index funds or ETFs of investment classes<\/a>. That way, the ups and downs are less marked, and your own reactions will be muted as well.<\/p>\n

2. Use a portfolio, not a hunch<\/strong><\/p>\n

Differentiate your investments buy deciding how much to own of stocks vs. bonds, real estate, commodities and cash. A\u00a0portfolio approach<\/a>\u00a0lessens the “all in” feeling of owning mostly stocks or mostly bonds and dampens the volatility of both over time.<\/p>\n

3. Rebalance with discipline<\/strong><\/p>\n

We know some asset classes move in opposite directions. It won’t happen according to a timetable or when you expect, but it does happen often enough and reliably enough to give you a chance to\u00a0book gains on some investments and reinvest<\/a>\u00a0those gains into things that have declined, i.e., “gone on sale” temporarily.<\/p>\n

4. Ignore the news<\/strong><\/p>\n

Absolutely give up on the idea that\u00a0following the market will make a difference<\/a>\u00a0in your long-term performance. It will, of course, but not the difference you would like. Paying close attention to the economic and stock market news is the surest way to feed the emotional beast within, raising the risk of selling or buying at exactly the wrong moment.<\/p>\n

5. Save enough<\/strong><\/p>\n

Once you have a solid portfolio and a grip on your own goals as investor,\u00a0make sure you fund that plan<\/a>. The second-biggest risk after your emotions is not putting enough money away in the first place. Great performance doesn’t add up to much if it’s applied to small dollars.<\/p>\n

You can retire on time and well. It’s mathematically possible and the investing tools are easy to learn and use. Just make sure your feelings about the markets don’t\u00a0become the reason you fail<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The biggest risk you face as a\u00a0retirement investor? It probably isn’t the stock market or even the economy. It’s you. Emotions are a major risk factor for any serious long-term … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7480,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[3],"tags":[62],"yoast_head":"\nA Retirement Plan for Any Market | MarketRiders<\/title>\n<meta name=\"description\" content=\"We know that the stock market will rise and fall in value. That's a given. 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