10 Retirement Pitfalls, Pitfall #10: Investing Too Aggressively
Yahoo has a list of 10 retirement pitfalls and I'm going to list and comment on them all. Here's today's pitfall:
Investing too aggressively: While you don't want to invest too conservatively, you also don't want to be investing in things that promise huge returns but are extremely risky. You should determine a set amount of money each month to put into something like a stock index fund for your retirement. If you can spare more money after you have contributed to the retirement fund, it is acceptable to invest in something a bit more risky. However, you don't want to be risking the main portion of your retirement money in risky investments that could very well leave you with no money in the end.
If anything, I could be a bit too aggressive in my investments. Not that I'm investing in Russian oil futures or pork bellies in Columbia. And it's not that index funds are that aggressive. But my asset allocation is almost 100% stocks. I'm moving more into bonds to be a bit more balanced, but if anything, I'm being a bit too aggressive currently. That said, I do have a long investment horizon (20-25 years) and I can handle the market ups and downs (remember the internet bubble? I rode that one all the way down -- buying all the time) so I can afford to be a bit more aggressive than most.
For more thoughts on investing, see these links:
Bond prices fall when rates rise. We are in a very high inflationary environment. If you add back food and energy, CPI should be 7-10%
http://www.isil.org/towards-liberty/inflation-gov-lies.html
Posted by: Dave | June 18, 2007 at 01:41 PM