Ten Years to Retirement?
Ten Years to Retirement?
Stock Market Video
This Week's Fortune Cookie
In Case You Missed It
Today, I want to speak to a very specific group: those who have 10 years to go before you reach retirement age.
I know that's a moving target. The age at which today's workers become eligible for their full Social Security retirement benefits is 66. (You can keep working and increase your eventual monthly rate, but you must start taking payments when you reach 70.) And many workers-perhaps because they don't have enough saved, perhaps because they're still enjoying work-aren't even planning to retire until they have to. And finally, a lucky few of you may be in your mid-40s and can see your way clear to hanging up your helmet and gloves by the time you reach 55. Congratulations.
But that leaves a huge group of people in their early to mid-50s who suddenly, after decades of work, find themselves just one decade from calling it a career, taking the gold watch and setting off into the sunset … and scared spitless about it.
That's because, if statistics are to be believed, only a relatively small fraction of you are exactly where you want to be in terms of your retirement funding. And many are nowhere even close to where you'd like to be.
Don't feel like the Lone Ranger. Those retirement-preparedness statistics also tell us that a vast majority of Americans do an equally vast majority of their retirement savings in the last decade before the Big Day itself.
At this point, you're hardly on your own. The companies who want to help you are legion. You see their ads everywhere and their brochures are beginning to overpower your snail-mail basket. They're sending you invitations to gourmet dinners where you will hear investment professionals talk about retirement planning, retirement housing, retirement healthcare, retirement homes, long-term health care and even prepaid funeral plots. The AARP is sending you at least one solicitation a month and local audiologists seem to regard you as a long-lost friend. How do you decide what to do? (I mean about the retirement stuff. The answer to the rest is the recycling bin.)
You may think that the big decision is which investment firm to use to handle your money. That's what all those ads on The Golf Channel want you to think.
But the real big decision is: How much of this are you going to leave to others and how much are you going to do yourself?
The advantage of hiring others is that you don't have to do much. Just send them the money on a continuing basis and read your quarterly statements as they come in. (Your statements will occasionally include news about how much the company is charging you to do this work for you … in the fine print, of course) You will be able to choose from a wide variety of index funds, sector funds, balanced funds, funds sliced up by market cap, by growth or value and by geographic region.
And if the markets go up, you stand a good chance of doing well, because most of those funds will be aiming at matching the growth of their target sector.
If markets go down, well, that happens from time to time. Don't worry about it. Just keep sending the money. Eventually things will go up. They always do . ( "May lose money. Not our fault.") You may also choose to have a financial advisor to help you make decisions. I can't say a thing against them. There are many good ones out there, and if you have a complicated financial life that includes estate planning, family corporations, complicated tax structures and other thorny problems, you probably already have one.
But I'm going to advocate for making a significant allocation of your retirement capital to the purchase of individual stocks and for managing your buys and sells by yourself.
Using Cabot's investment advisories, you can adjust your portfolio to match your own investing personality. You can get specific buy and sell recommendations in growth stocks, value stocks, dividend stocks , momentum stocks, small-cap stocks and options.
You won't have to sit passively by while the market chews your portfolio to bits as it did in 2000 and 2008. You will be guaranteed never to miss another bull market or stay fully invested in a bear market.
You will have access to investing techniques that have been helping individual investors to thrive for 43 years. And you will be actively engaged in the process. You will make the buys and execute the sells.
The deep satisfaction you will gain from taking charge of your own retirement investing will be enormous. And the potential rewards are substantial.
The Cabot China & Emerging Markets Report , which I write, earnings my subscribers a 51% gain in 2013. Other Cabot advisories also outperformed broad market indexes by huge margins.
Ten years to retirement? Time to get active. Take charge! We can help. Click here to view Cabot advisories.
Stock Market Video:
In this week's stock market video, Mike Cintolo takes a thorough look at the recent weakness in the market and individual stocks. There's something for every investor in this video: Stocks that are holding up well (including many liquid leaders), those that are not, how you should adjust your portfolio and what to watch for in the days ahead. Click below to watch the video!
Tim's Comment: Markets don't always do what you want them to and they sometimes do things that no experts thought were even possible. When crises hit, it's comforting to have Cabot's more than four decades of investing experience on your side.
Paul's Comment: General Dwight Eisenhower, who ran the war in Europe for the Allied Forces, used to say that plans were useless, but that planning was essential. It sounds a little paradoxical, but if you think of how unlikely it is that a plan will work perfectly at every step, it makes sense. Even when a plan goes awry, the planning you have done (which includes what to do when the plan goes south) will keep your mission clear and your strategy on point. In other words, if you're going to have to come up with "hastily contrived answers," you'd better be sure you have some planning under your belt.
In case you didn't get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, there are links below to each issue.
Tim Lutts, Chief Analyst for Cabot Stock of the Month, writes in this issue about bitcoins, marijuana and fine art as alternatives to stock investing (and offering a free download of his wife's art book). He also gives the tenth in his series of disruptive stocks: SolarCity ( SCTY ) .
In this issue, I start the conversation about the importance of getting more active in working toward retirement. 401(k)s are fine, but they're way too passive to achieve real gains against inflation and predatory markets. Stock discussed: Harman International ( HAR ).
In this issue, Mike Cintolo, the growth guru behind Cabot Top Ten Trader, begins a series of lessons on how to read stock charts. This isn't a hugely technical set of arcane patterns, rather it's a look at some practical ways to get buying and selling cues from charts. Stock discussed: Freescale Semiconductor ( FSL ) .
Have a great weekend,
Chief Analyst of Cabot China & Emerging Markets Report
and Editor of Cabot Wealth Advisory