{"id":88999,"date":"2016-05-02T06:39:37","date_gmt":"2016-05-02T10:39:37","guid":{"rendered":"http:\/\/countingpips.com\/?p=88999"},"modified":"2016-05-02T06:39:37","modified_gmt":"2016-05-02T10:39:37","slug":"the-wild-ride-of-retiring-in-a-bull-market","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/05\/the-wild-ride-of-retiring-in-a-bull-market\/","title":{"rendered":"The Wild Ride of Retiring in a Bull Market"},"content":{"rendered":"
May 2, 2016<\/div>
\r\n<\/div><\/div>

By WallStreetDaily.com<\/u><\/a> \"The<\/p>\n

It\u2019s official \u2013 the U.S. stock market is now enjoying the second-longest bull market<\/a> in history.<\/p>\n

This bull run started on March 9, 2009, and continues to maintain record-breaking momentum.<\/p>\n

As a former broker for nearly 20 years, I have advised countless people on how to structure their portfolios. But this gives me pause\u2026<\/p>\n

When reflecting on Baby Boomers specifically, there\u2019s much to consider \u2013 primarily, how much equity exposure should they have in their retirement accounts? Especially after such a long bull run.<\/p>\n

But, before I delve into some answers, it\u2019s crucial to address a bit of background information.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Too Much Is More Than Enough<\/h2>\n

Before this bull market gained steam, the S&P 500 Index lost 55% between October 2007 and March 2009. And Target Maturity Funds \u2013 which are supposed to be a safer investment \u2013 lost about 25% in that same time frame.<\/p>\n

The 17-month span was devastating to many people approaching retirement. Why?<\/p>\n

Because their portfolios were far too top-heavy in their exposure to stocks. According to the Employee Benefit Research Institute, nearly a quarter of investors between the ages of 56 and 65 had 90% of their portfolios in stocks. And more than 40% of these investors had over 70% exposure to stocks.<\/p>\n

I have no doubt that this was due to many Baby Boomers trying to play catch-up while planning for their later years. In other words, not having saved enough during the earlier part of their lives, these Baby Boomer investors were seeking high yields on a limited time horizon.<\/p>\n

\"Monthly<\/p>\n

The latest data suggests that this is a recurring problem.<\/p>\n

Most people approaching retirement have too many eggs in the stock basket. In fact, one survey showed that 10% of these investors had a 100% allocation to stocks!<\/p>\n

Here\u2019s a tip from a Wall Street insider \u2013 this bull market will end, just as all previous bull markets have, and eventually, come to a close. But this time it may be detrimental to the savings you\u2019ve counted on having in your golden years.<\/p>\n

Moving Forward<\/h2>\n

With retirement approaching, it\u2019s crucial to take action to maintain your savings.<\/p>\n

Forget the tired old formulas that said your stock allocation should be 100 minus your age. Or 120 minus your age.<\/p>\n

My view is always different. My stock picks are always contrarian. And my sugges<\/p>\n

tions for those nearing retirement age are not the norm. I like to call it \u201cSmart Investing.\u201d<\/p>\n

I believe that, for two to three years before retirement and two to three years afterwards, the allocation to stocks should be low.<\/em> Something in the 20% to 30% range. The rest should be parked in something safe, boring, and low-risk \u2013 like Treasuries.<\/p>\n

That way, a crisis \u2013 like the one we saw play out in 2008 \u2013 won\u2019t destroy what should be your golden years.<\/p>\n

You may not get a major payday return. But at least your principal remains secure.<\/p>\n

After that two- to three-year grace period has passed, however, your allocation to stocks should increase<\/em>. I would, actually, advise raising it aggressively back to the 70% to 80% range.<\/p>\n

The reason? Stocks do offer the best returns \u2013 in the long term.<\/p>\n

With an increasing number of people living 30 years or more after leaving the workforce, growing your money is vital. And, once you\u2019ve secured your retirement and maintained that security, you\u2019ll be ready to take on a few more risks again.<\/p>\n

No one wants to outlive their money \u2013 but it\u2019s always a possibility, especially if the proper precautionary measures are not taken, and considering healthcare costs for the average couple in retirement are currently around a quarter of a million dollars.<\/p>\n

When all is said and done, the bottom line is: Reduce<\/em> your stock exposure in the five-year period around your planned retirement date. Then, once you\u2019re comfortable in your post-workforce years, feel free to let loose and aggressively raise <\/em>your allocation to stocks.<\/p>\n

Just because you\u2019re retired doesn\u2019t mean you shouldn\u2019t live a little!<\/p>\n

Good investing,<\/p>\n

Tim Maverick<\/p>\n

The post The Wild Ride of Retiring in a Bull Market<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com It\u2019s official \u2013 the U.S. stock market is now enjoying the second-longest bull market in history. This bull run started on March 9, 2009, and continues to maintain record-breaking momentum. As a former broker for nearly 20 years, I have advised countless people on how to structure their portfolios. But this gives me […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-88999","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/88999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=88999"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/88999\/revisions"}],"predecessor-version":[{"id":89019,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/88999\/revisions\/89019"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=88999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=88999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=88999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}