Retirement

In recent years, U.S. stocks have outperformed international stocks and growth stocks have outperformed value stocks. This has led many to question the benefits of diversification and ask what they should do when an investment strategy performs poorly. We should begin with a look at the appropriate lens through which to view investment strategy performance.

“I don’t know...something just doesn’t feel right,” you mumble through your mask to your primary care doctor while sitting on the examination table under a flickering fluorescent light in a room decorated with anatomical charts and hand-sanitizer dispensers. After listening to your heart and your lungs, the doctor diagnoses your feelings of worry as a mild condition that is easily treatable but could become serious if a proper treatment regimen isn’t followed.

“Patience is bitter, but its fruit is sweet” were words most famously spoken by the ancient Greek philosopher Aristotle. The wisdom in this adage can be applied to so many aspects of life, including investing. The current low interest rate environment has many investors reaching for yield by moving into longer-term, lower-quality bonds. But the fruits of that decision might not be as sweet as expected.

You’re probably aware that there are many options for retirement planning including 401(k)s, IRAs, Roth IRAs, and more. Some of the more common plans are employer-sponsored ones like 401(k)s, 403(b)s, and 457(b)s. These arrangements have higher contribution limits and let employees save for retirement on a post-tax or a tax-deferred basis, which is more typical.

 

 

Retirement can invoke a mix of conflicting emotions from anticipation to fear, excitement to anxiety. It’s one of the biggest life changes we experience in our adult lives. Most of us anticipate and save for it for decades. But, going from receiving a paycheck for most of your adult life to living off the wealth you have amassed is no doubt an unnerving transition. 

It may be somewhat serendipitous that Barbie’s birthday, March 9, occurs during Women’s History Month. She turns 60 this year.

I recently discovered an article titled, “I Took All My Money Out of the Stock Market and It Feels Amazing”, by Roz Warren, a librarian and writer.