The number 1 way to protect and grow your retirement nest egg

by , 07 March 2016

One of the keys to successful income investing is proper asset allocation, how you balance your portfolio among stocks, bonds, cash, real estate, commodities, gold, and other investments. And asset allocation is not just for your investment portfolio. The can apply the same strategy to your retirement nest egg. Read on to discover the number one way to protect and grow your retirement nest egg…
 
If you keep your entire net worth in shares and the market pulls back, you'll suffer badly regardless of what shares you own, Dr David Elfrig in Daily Wealth explains...
 
Likewise, if you hold your net worth in gold and it falls $100 an ounce, your lack of asset allocation will hurt you.
 
Concentrating your retirement nest egg into just a few shares or a few asset classes is far too risky.
 
How to divvy up your nest egg
 
One of the simplest ways to begin is to consider just four general asset classes you need to spread your wealth among to keep you financially balanced and healthy...
 
  • Cash: 10%-45%
  • Shares: 25%-70%
  • Fixed income: 10%-50%
  • Chaos hedges: 1%-15%
 
Note that each of those asset classes has a range of what percentage of your portfolio you should put in it, rather than a specific number. That's because everyone's situation is different.
 
If you're in your 30s or 40s, your asset allocation should be different than if you're retired. That's because you have the ability to take more risks with your portfolio.
 
So you need to determine how risky a portfolio you can stand, and what your time frame for investing is. Then you can set your percentages accordingly... and stick to them.
 
 
If income investing suits you as a strategy you should focus on shares and fixed-income assets. But it’s a good idea to add some "chaos hedges," like gold or farmland. This will help to protect you in case of a market disaster.
 
So there you have it, the number one way to protect and grow your retirement nest egg.
 
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Six steps is all it takes to pay off all your debt and make way for your dream retirement...
 
If, like my mom, you’re 55, earn R360,000 a year, have no current retirement savings and spend R10,900 servicing your monthly debt, discover how my six-step approach can help you.
 

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