The theme this week on the One Minute Retirement Tip podcast is: How To Recession-Proof Your Retirement.
Today, I’m talking about how to protect your investments in a recession by rebalancing BEFORE the recession starts! A lot of people get into trouble because they are close to retirement, yet they haven’t rebalanced their portfolio in years. Some people approaching retirement have 80, 90, or even 100% of their portfolio still in stocks.
Taking the time to rebalance is critical right now with the stock market near it’s all time high. We’re coming off of 3 strong years in performance in stocks. Yes, the stock market could continue to go up from here, but now is the time to rebalance your portfolio to ensure you have the right mix of stocks and bonds for your age and proximity to retirement.
When your portfolio is invested appropriately for your age and proximity to retirement, you’ll be able to sidestep the worst of a bear market drop during the next recession. The S&P 500 typically drops about 33% in a recession. But if only 50% or 60% of your portfolio is in the stock market, and well diversified, you may only experience a 10 or 15% drop, which is a lot safer for your retirement and a lot easier to recover from.
If you want to know the mix of stocks that we recommend for our clients by age, you can email me and I will send you our age-based asset allocation cheat sheet. It’s a guide to what your stock and bond mix should be for your age, and it’s the foundation that we when building portfolios for all of our clients.
Just shoot me an email - ashleym@truenorthra.com. That’s a-s-h-l-e-y-m@truenorthra.com and I’ll send you your free age-based asset allocation cheat sheet, to help you determine the right mix of stocks and bonds for your portfolio.
That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.
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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance