Confessions of a 65 year old investor – part 2

In the first part of this article, we reflected on the fact that a 65 year old investor was a long term investor. Now, in Part 2, we continue this discussion.

What should a 65 year old’s investment strategy look like?

Firstly, whenever we speak about investing, the first consideration should be “peace of mind”. There is no point at all in making investments that result in worry and keep us awake at night. Our investments must pass the “sleep test”.

Having said that, a well-diversified investment portfolio that includes a mix of both growth assets (property and shares) and some more defensive assets (fixed interest securities such as bonds, term deposits and cash) can make a great deal of sense.

The thought of investing exclusively in cash based investments simply because we have retired makes very little sense at all, unless we are not planning on being around too long!

How we should invest our money should be dependent on our personal circumstances, goals and objectives and our attitude to risk. No two people’s circumstances are the same. We are all unique individuals, even between members of couples.

When it comes to considering how you should be investing your hard-earned savings, my advice to you is:

  1. Have a clearly defined set of goals or objectives;
  2. Understand your attitude toward risk,
  3. Develop an investment strategy that best reflects your risk profile, and stick to it;
  4. Avoid fads or unusual investments you don’t understand;
  5. Accept that if an investment sounds too good to be true, then there is better than fair chance that it is; and
  6. Be willing to compromise.

A quality financial planner has the tools and skills available to help you determine your risk profile and the appropriate mix of investments best suited to your circumstances and needs.

Most importantly, ignore the idle chatter and the investment recommendations offered by family members and friends, taxi drivers and the media. Seek advice that is truly appropriate to your own circumstances.

Developing an ongoing relationship with my financial planner was one of the best financial steps I have taken.

But most importantly, remember that just because you have turned 55, 60, 65, or 70, you are long term investor and some exposure to investments that provide a mix of income and capital growth is worth considering.


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