Bulls and Bears

If you have a long investment horizon and your goal is to accumulate wealth, moving out of the market in anticipation of a decline is not a good strategy. Why? Only hindsight can tell you whether you are making a good decision.

A better strategy is to take advantage of market declines when they come around, as they will by definition — every bull is followed by a bear, and every bear is followed by a bull.  If you are a retiree whose livelihood depends on your investments, the same goes for you, with one major exception: Unless you have the option of going back to work, you need to protect your principal.  There are a number of ways to do that.

For those with modest savings, retirement income products can augment Social Security with pension-like streams of income.

For others with plentiful assets and sizeable needs, there are many more possibilities: Hundreds of firms manage wealth.  Find one to retain.  Look to a) protect principal in declining markets while b) producing income to cover yearly expenses and c) growing assets to offset inflation and taxes, and for legacy purposes.

This blog is an excerpt from Julie's weekly column (Dec. 2, 2016).  To request a full version, email readers@juliejason.com.

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