How To Avoid Investing In The Wrong Stuff

September 19, 2013 2:31 PM
How To Avoid Investing In The Wrong Stuff
" BOSTON (CBS) – Most investors don’t even know they are in the wrong type of investment until it’s too late. Asset allocation is simply what your money is invested in; stocks, bonds, cash, real estate. Your time horizon is when you will need the money for the goal.

For example, the goal is a comfortable retirement. So you take advantage of your 401(k) plan at work and start to squirrel away money. You’re getting the company match of 3% so you are thinking you are doing well. Your time horizon is 25 years to retirement so you invest the portfolio in a 100% stocks.

Let’s fast forward here. It is now 2013 and you are approaching that magic Medicare age. You are thinking retirement in a couple of years. You look at your 401(k) statement and you are still 100% invested in stocks "

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