Sponsored by Sarah Cecil
If you’re a certain age, or getting close to it, you might hear something like this: “Now that you’re older, you need to invest more conservatively.” But what exactly does this mean?
For starters, it’s useful to understand that your investment preferences and needs will indeed change over time. When you’re first starting out in your career, and even for a long time afterward, you can afford to invest somewhat aggressively, in stocks and stock-based investments; because you have time to overcome the inevitable short-term market drops. At this stage of your life, your primary concern is growth – you want your portfolio to grow enough to provide you with the resources you'll need to meet your long-term goals, such as a comfortable retirement.
But when you finally do retire, and perhaps for a few years before that, your investment focus likely will have shifted from accumulation to preservation.