Managing Financial Market Risks
Carol Bogosian discusses managing financial risk based on your investment time horizon.
Key Takeaways
- Diversify across stocks, bonds, and cash based on your expected retirement time horizon to reduce portfolio volatility when you need to make withdrawals
- Use pooled investments like mutual funds, target-date funds, index funds, and ETFs to diversify within asset classes and reduce risk from individual stock or bond performance
- Avoid withdrawing assets immediately after market losses, as this locks in losses and significantly reduces your long-term returns and increases risk of running out of money
- Monitor and minimize investment fees and expenses, which directly reduce your potential investment income throughout retirement
- Understand sequence of return risk: losses in the early years of retirement are more damaging than losses later because you're withdrawing funds simultaneously, so prioritize protecting against early-retirement downturns
Managing Financial Market Risks: Carol Bogosian discusses managing financial risk based on your investment time horizon. To see more videos on finStream featuring Carol Bogosian, please click on this link: https://www.finstream.tv/featured/carol-bogosian/
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