Monthly Archives: May 2020

There are three basic categories of investments: • moderate • conservative • aggressive Aggressive instruments are those primarily invested in for growth. As the chart shows, they include things such as common stocks, stock mutual funds, commodities, and speculative real estate. Again, these are typically invested in for growth or capital appreciation, not income. They are considered aggressive because, while they can provide large short-term gains, they can also cost the investor large, sudden losses.

Before you retire, you should know what all your various sources of income will be, and how much you can expect to receive from each. Obviously, Social Security benefits will be one of those sources, but how much you can expect to receive depends on many factors. There are ways to maximize your benefits and get the most that you’re entitled to, and there are strategies to minimize your tax burden from Social Security. The most important thing to consider in working toward those goals, however, is whether your Social Security benefits are coordinated properly with your other assets and sources of retirement income. We’ll address that shortly, but let’s begin with some basic facts about Social Security.

Nothing exists in a vacuum, meaning that even if you’ve determined the best time and method of taking your Social Security benefits based on your age, objectives, and lifelong earnings, it won’t matter unless you properly coordinate your benefits with your overall retirement income plan. Most people agree that Social Security is not enough to live on in retirement and needs to be supplemented with other sources of income. Therefore, it is essential to make sure your other savings and investment vehicles are as reliable as Social Security and capable of meeting the same financial objective: providing income that you can’t outlive.

The great Alabama coach “Bear” Bryant once said, “Defense wins championships,” and you can bet that almost every great coach in nearly every sport has shared that same philosophy. Just think about some of the great sports dynasties, teams that won championships year after year: the Green Bay Packers under Vince Lombardi, the Boston Celtics under “Red” Auerbach, the Yankees under Joe Torre. You could go on and on.

Have you ever bought a pair of pants for your child or grandchild that were too big? It’s a common occurrence, and when it happens, you basically have two options: 1) you can throw the pants in the wash and try to shrink them, or 2) you can just sit back knowing that your child or grandchild will eventually grow into them. This same phenomenon applies when the price of stocks gets overinflated in relation to annual corporate profits. If you can learn to recognize when it’s happening, that knowledge can go a long way toward helping you make smart savings and investment decisions.

If you’re like most people, you believe there’s a great deal of truth in the old adage that history tends to repeat itself more often than not. That’s an important adage to keep in mind when it comes to saving and investing for retirement because it allows you to get a glimpse into the future by knowing something about the past. The fact is, the stock market has been repeating itself consistently enough throughout history to allow us to see some repeatable long-term patterns, or market “biorhythms,” which are important to recognize and understand when it comes to building a smart, defensive investment strategy.