I met a gentleman recently who asked me an important question. He said, “What are the investment opportunities you see on the horizon?” Opportunities always exist. In fact, Albert Einstein once said that in the middle of difficulty lies opportunity. As you look out into the economic landscape, you may feel a bit uncertain and perhaps you see difficulties ahead. After all, stocks prices are well above their median for the past three decades, and the current bull market for stocks is the second longest in American history. Typically when people are concerned about stocks, they increase their allocation to bonds. However, bonds are trading at historical lows, the 10 year treasury bond is paying less than 2 percent, and the 30 year treasury bonds is paying less than 2.5 percent.
Many people feel that both stocks and bonds have been stretched, and so the question becomes where do we go from here? If you are more than 10 or 15 years from retirement, then you don’t need to be concerned with any of this just yet. The key is to think long-term and realize that short-term volatility is not the same as risk. Time is the cure to the volatility of the stock market. The bigger challenge is for those who are within a few years of retirement because the real risk is not short-term volatility, but the risk that you may need to draw down your assets at a time when the market is making a correction. In this type of environment and for those getting ready to retire, a good defense may be your best opportunity. At our website www.parker-financial.net, we have a retirement kit you can download with three separate guides that address several topics you should consider when planning your retirement.
As seen in Westsound Home & Garden Nov/Dec issue.