Maintaining a Healthy Mix of Stock Holdings into Retirement

​Based in Orlando, Florida, International Assets Advisory provides a host of dedicated brokerage and money management solutions. International Assets Advisory professionals work closely with clients in ensuring that allocation strategies meet individual’s specific timelines, as well as risk profiles.

A recent Time Magazine article drew attention to the fact that many people are rethinking the maxim of automatically reducing equity exposure as they move into retirement and beyond. With life spans often extending into the 80s and 90s, being overcautious in stock holdings, in favor of fixed income bonds, can backfire by reducing a portfolios’ long term upside potential.

Some analysts point to between 35 to 55 percent exposure in equities as ideal for those who are retired, with the lower percentage benefiting those who have robust nest eggs and don’t need to generate much additional growth.

One basic rule is the concept of finding a stock allocation that is comfortable for you and your family and sticking with it. In a case where market volatility is causing major financial headaches, the allocation has not been properly weighted on the less-risky end of the spectrum. To avoid this situation, it makes sense to maintain approximately three years of expenses within a short-term bond fund or other cash equivalent, such that the stock portfolio does not need to be drawn from in case of an economic downturn.

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