Trading Advice Before Hitting Retirement

by Jonathan G 6 months ago in advice

You need to settle down with your money.

Trading Advice Before Hitting Retirement

Advancing in your career and paying into Social Security has to lead up to one thing: your retirement. Of course, having a fulfilling retirement full of fun requires more than your monthly pension, and you need to plan out your investments so you can have a blast in your golden years.

Whether you want to cross off climbing Mount Kilimanjaro off your bucket list or move to Cancun, you will need the financial means to do so. This article will hopefully open your mind to a new attitude towards trading, assuming you are nearing retirement age.

Hold a Safer Portfolio

When you’re in your twenties, it’s the perfect time to roll the dice on highly volatile investments for the chance at huge returns with little capital. Modern examples would be cryptocurrencies or penny stocks, in which Millenials seem more invested.

At age 50, you need to think about maintaining your assets and fighting inflation rather than trying to strike oil. If you didn’t already have a traditional retirement account started since your early days of working, it probably isn’t worth it to start one today. Instead, you should think about more pragmatic investing.

Holding just stocks isn’t cutting it as you need to hedge against the volatility in today’s market. A reasonable approach is to hold 50% of assets in stocks and the rest in bonds or ETFs. It may also be worth dabbling in peer-to-peer lending or real estate (if you know what you’re doing).

If you are still insistent on picking your single stock pony, you are better off riding an index fund rather than researching and picking companies you feel confident in. Warren Buffet himself is always bullish on the S&P 500, and past investors would be extremely wealthy if they stuck with this index fund over following the market mania.

What About Gold & Silver?

The value of gold is known to withstand collapses of civilization and is portable between borders. Many people are optimistic about its value in the future, especially since currency inflation is a worldwide concern. Technically speaking, even buying gold jewelry or coin collections counts as a gold investment, as long as you focus on its intrinsic value.

As for using gold as a retirement plan, you should still consider it to be a speculative investment just like Bitcoin is at the moment. The value is more theoretical rather than being backed by market data, and you’re going to get too old to play around with such volatility.

There still isn’t any harm in keeping a fraction of your assets in gold or precious metals. If you do decide to keep a stash, make sure that you have the physical gold rather than the promise of it being kept in some secure vault somewhere distant. Just take a look at what happened with the JP Morgan silver scandal.

Thinking About a Financial Advisor

Unless you had a career in finance, you are probably prone to trading with the emotional side of your brain rather than the logical half. Since you don’t have much time left to be making mistakes with your money, it may be time to consult with a financial advisor on where your money should be invested to meet long-term goals. They are well-versed in market theory and keep up with the latest data to know how to make stable gains.

Wrapping Up

Everything in life costs money and it’s no different once you hit retirement. If you have a big stash of money and/or passive income, you could easily cross off all the things on your bucket list. Be sure to trade smart and avoid fads so your retirement funds don’t get swallowed up by the whales of the market.

Jonathan G
Jonathan G
Read next: How Weed Stocks Are Getting Millennials to Invest
Jonathan G
See all posts by Jonathan G