Keep the Same Investment Strategy Regardless of Your Stage in Life
I’d like to share something that is absolutely true and at the same time might be a little painful.
The Markets Do NOT Care
The markets do not care what stage of life you are in. I know that sounds funny, but we can sometimes think we should invest differently because of something going on in our own life.
Maybe we just bought a home and are rebuilding our savings and we think perhaps that means we should invest more conservatively. Or perhaps we are taking a sabbatical and think that means we should change our portfolio since we won’t have income for a while.
No, no and no.
Don’t Change Your Strategy, Change Your Savings
Our stage in life definitely affects how we should do many things, but not how we should structure our portfolio. The returns we get from the markets have absolutely no dependence on what is going on in our lives. Instead, we should look at whether we have money in the markets or not. Not how they might be invested.
For our couple who is rebuilding their savings, consider lowering the amounts you are putting into the markets and saving more aggressively to get to your target.
For the couple that is going on sabbatical next year, begin saving more today so that you’ll have plenty of funds to allow you to enjoy your time away and still have the finances to get you back on track when you are ready to reenter the workforce.
Do not change your portfolio, change your savings patterns. Focus on what you can control, your savings patterns, and not on what you cannot control, the markets.