We don’t just post dental articles! This website – Wealthy Retirement – provides all kinds of tips and good advice for retirement and investing. This recent article is entitled 5 Factors for Determining Portfolio Survivability by a bond strategist, Steve McDonald. The article is about successful retirement planning and provides a few great tips. Click on the link to watch the 2 minute video with more details. Happy investing!

5 Factors for Determining Portfolio Survivability

Steve McDonald By Steve McDonald, Bond Strategist, The Oxford Club

When it comes to successful retirement planning, two key principles reign supreme: risk tolerance and timing. And while it sounds complicated, keeping track of your goals for both targets doesn’t have to be stressful.

In fact, you can easily keep your finger on the pulse with a quick test. Steve McDonald says that by asking yourself five simple questions every few months, you’ll know whether it’s time to make adjustments. Get the checklist in today’s Two-Minute Retirement Solution.

In my Two-Minute Retirement Solution segments, I often talk about owning the right kind of investments for retirement and owning investments appropriate to your risk level.

But because every person’s risk tolerance is different, the idea of appropriate holdings is also different for each person. So we are kind of left hanging until we figure out where we fall on the risk continuum.

And in most cases, we learn through trial and error. And it’s always a costly lesson.

So here are a couple of checks you can run on your portfolio. They won’t determine your holdings for you, but they should give you a pretty good idea of whether you own investments that are within your risk tolerance.

The first is my favorite: You don’t know who Jim Cramer is.

Don’t get me wrong; Jim Cramer has his place. But coming up with as many ideas as he does in a single day is absurd. You just can’t do it with any degree of safety. And safety is the first thing you should consider when it comes to your retirement portfolio.

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Next, if you plan appropriately, and the market’s performance over the next five years is miserable, you won’t be.

Appropriate also means stable. And that’s what keeps you in your holdings when things look bleak.

The next one: You don’t have any hot stocks to boast about.

I have said it many times before; our “stock of the month” club and speculative trading days are over. If you haven’t learned that yet, you will, and it will be the hard way I assure you.

Next on the checklist: A year from now, you plan to own the same investments.

One of the nicer aspects of being older and very conservative is that there is little to do, or there should be, if you have the right holdings.

Back before the rate scares in bonds and the crazy selling we saw in December 2015, I had to regularly tell my bond readers to sit tight and do nothing. For most folks, that’s impossible. But having to do nothing is a good sign you’re in the right place.

And the next indicator is that you’re so well-diversified, you always have at least one disappointing stock in your portfolio.

This may seem contradictory, but if you haven’t learned yet… these things go up and down; that’s the nature of the market. And finally, the coup de grâce. You never say to yourself, “Wow! I never expected that!”

At this point in our lives, surprises are the last things we need. Most of us have had all we can take for one lifetime. And my three decades in the markets have taught me that most market surprises are not reasons to celebrate.

That’s it. This inventory isn’t scientific or even documented, but it’s a quick, experience-based check of your market survivability.

Good investing,

Steve

 

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