We discussed the 5 major risks every retired investors face in this blog post. How to deal with these risks?
To begin with, diversify. A properly diversified portfolio can address different types of risks. And more specifically, to mitigate each of the 5 retirement investment risks, please consider the following:
Interest rate risk -- Make sure investments mature at different times.
Legislative risk -- Don't take this risk. Ever.
Liquidity risk -- Ensure that you have enough liquid investments to cover your living expenses for two years.
Inflation risk -- Invest enough in the stock market so that you have growth.
Capital loss risk -- Use a buy, hold and sell strategy that helps you get out of the market during risky times.
To begin with, diversify. A properly diversified portfolio can address different types of risks. And more specifically, to mitigate each of the 5 retirement investment risks, please consider the following:
Interest rate risk -- Make sure investments mature at different times.
Legislative risk -- Don't take this risk. Ever.
Liquidity risk -- Ensure that you have enough liquid investments to cover your living expenses for two years.
Inflation risk -- Invest enough in the stock market so that you have growth.
Capital loss risk -- Use a buy, hold and sell strategy that helps you get out of the market during risky times.
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