Creating the ideal retirement portfolio
By Gordon Powers, Sympatico / MSN Finance
Sadly, many people have found out too late that stocks are suitable only for money that they won't need for several years. No one knows the ideal time horizon for holding stocks but you can be certain that it's extremely risky for money that you think you'll need in a year or two.
And if you didn’t know this before, 2008’s meltdown brought it home with a vengeance.
Older investors, in particular, need to be wary of market downturns as they enter what York University prof Moshe Milevsky has labelled the "retirement risk zone" — namely, the period just before or after they leave work.
This is because the weak market performance during this critical period can erode their nest egg, leaving them without sufficient time to recover.
What's the ideal mix then? Well, a blend of 35% stocks and 65% bonds is likely the right combination for most of those heading into retirement, suggests research from Russell Investments Canada. Over time, you get roughly the same result as 100% stocks but with a lot less aggravation. Click here for a look at the past 28 years using this strategy.
While a stack of cash can provide stability, it offers little in terms of longer term growth and may not last long enough, Russell believes. On the other hand, even though a stock-only portfolio will provide that higher long-term growth, it comes with more uncertainty than most investors can handle.
Posted by: sally | Mar 23, 2021 10:13:03 AM
With the multi-trillion boondoggle of Obama's making, no one will have a retirement fund.
Posted by: richard | Mar 23, 2021 10:58:44 AM
I am completely disgusted and angry with my previous employers whom have 'taken' my company pension plan contributions and used them for the overall good of the company.(I have worked for three Canadian based companies during my career and each time they were taken over by another larger company, usually american or french. My pension contributions and those of the employer, disappeared upon my immediate layoff). The contribution funds, those of my own and the employer are being used in other capacities within these companies never to be seen by me.
This is an accepted procedure allowed by the statutes of Canada. Well, I have had enough. It is my perception legislation should be tabled to protect these company pension plans or failing that legislation taking the onus on the employer to deliver the contributions to Ottawa for investment in bonds or Canada sponsoured investments in Canada, so that when the time comes for me to want to retire, the funds are there.The funds should be 100% guaranteed by the Crown. When combined with the Old Age Pension and the CPP, there will be a nice nest egg for me to rely on. However, unlike present government pension plans my private-company pension plan will be 100% payable to me and my investors.
It is too late for me to benefit from such a radical approach to protecting an employe's pension plan but those coming behind me will certainly gain. I encourage everyone to contact their local MP and ask them if they have sensed a ground movement towards this direction. If not, then ask them to talk it up and have their respective political party table a paper in the House of Commons for debate and passage into law. We would be better for it in the long run. As far as the empoyers are concerned, they would no longer have 'my pension funds' to draw on to run the company or pay outragous bonuses to a selected few. Tough cookie!
This is legal thievery at its best and corrective action to protect the ordinary 'Joe' is long overdue.
Posted by: Andy T | Mar 23, 2021 6:56:52 PM
If there is an ideal retirement portfolio, the portfolio has to be changed and reviewed everyday according the the market and economy conditions. The economy change too fast, invest stock market just like going to casino. Cash will have inflation - especially US start printing money. Real estate - US bank bad asset caused by estate price falling to fast. What should we hold?
Posted by: richard | Mar 28, 2021 2:36:43 AM
there is not ideal retirement portofilo. Your savings account, rrsp, stock, wherever you put your hard making money you make richer people who are enough rich they are lions and you are just hiena and you get leftover or nothing. Economy ? what is that ? in present market meltdown boses of gigants companies make sure that their money are secure, and they are untachable, thousands of ordynary people save their money cutting everydays spending, some become workoholic to save money for retirement, hard working for years, and after disaster like now they can't retire .
Posted by: Davis | Mar 29, 2021 3:13:09 AM
While a stack of cash can provide stability, it offers little in terms of longer term growth and may not last long enough, Russell believes. On the other hand, even though a stock-only portfolio will provide that higher long-term growth, it comes with more uncertainty than most investors can handle.This article is really fantastic.
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Davis
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Posted by: Penny Stocks Kit | Apr 25, 2021 9:27:15 PM
"It is too late for me to benefit from such a radical approach to protecting an employe's pension plan but those coming behind me will certainly gain."
That's true... nice post
Posted by: Penny Stocks | Dec 12, 2021 6:51:35 AM
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