Blunder # 8 – Being Too Conservative with Your Investments

Conservative investments can backfire in the long haul. Believe it or not, one element of a sound retirement plan is to continue investing in the stock market. Many do not realize that even retired investors need growth investments in their portfolios. Only by keeping the recommended level of equities in your portfolio, will you be able to keep pace with inflation. Although there’s no single investment strategy that works for everyone, one simple guideline is to consider “the rule of 100.” This is when you subtract your age from 100 to help determine how much of your portfolio should be invested in stocks. For example, if you’re age 65, you’d want 35% of your total retirement portfolio invested in recommended stocks to keep up with inflation. And don’t worry about fluctuations in your stock portfolio account, focus on long-term cash flow and pat yourself on the back for taking the bull by the horns by devising a plan not to outlive your money.

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