Even as you invest your money while you enjoy your golden days, you should know what mistakes you should avoid especially in regards to investment. There are some investments mistakes that seniors tend to make. Some of the most common ones are discussed below. These mistakes can potentially jeopardize your retirement and old age. Read on to learn about them and to find out how you can avoid them.
- Being too conservative when investing
Following the economic recession that happened years back, most seniors don’t like investing their money in the stock market. For many years now, many financial advisors have constantly advised seniors not to invest in individual stocks and other riskier assets. Instead, they have encouraged seniors to venture into CDs and bonds and other cash-preserving investments. Get it from me, this is not a good piece of advice, and you must not be guided by it. Unlike in the past, it has become impossible to find CDs that can yield more than 1 percent, and you will not find it easy to find a bond which can return in excess of 4 percent. This is because bonds and CD rates have been pushed to very low levels, and this trend has continued for decades now. Despite this fact, senior citizens across the world still allow themselves to be influenced negatively and they continue to engage continuously in these investments. You should realize that just a small percentage of inflation rate will make your small money-gains worthless if you engage in such investments.
You should instead do twofold. Be sure to remain active in the management of your money if you are able to do twofold. You can also invest some of your money in stock market. Do your research and buy stocks which exhibit healthy dividends, strong cash-flow, and low-volatility to shareholders.
- Using an investment as security to take loans to supporting friends
Of course, it’s a good thing to support your friends. However, it is foolish to take loans with your investment as a security to help friends. This will only jeopardize your investment and put you at risk of losing it all.
- Ignoring investment trends
Most seniors fail to take investment trends seriously before venturing into investments, or as they continue to actively get involved in the investments that are affected by such trends. It’s important to note that new trends shape every investment. It’s good to look out for any new trends in your industry and then align your investment accordingly. Otherwise, you might lose out on the gains, or you might be forced to bear the negative consequences that come with such trends.