Follow along as we consider how your finances…are like your lingerie.
We already explored how your finances, like your lingerie, are intimate. But how else are they similar? Here’s principle two for understanding how these two elements of your life fit together (or not!):
Principle 2: You probably have a portfolio that doesn’t fit.
You likely know by now that most of us are wearing the wrong bra size. Oprah did a whole hour on this!
Here’s the comparison with money, gleaned from my work as an advisor: most people have investments that are a poor match for their circumstances. To the extent that they have a “financial plan,” it isn’t one that fits with their lives.
For example: there are couples who say they are “conservative” investors who cannot emotionally handle a lot of volatility but whose investment portfolios contain only individual stocks (gulp!), with no cash or fixed income to buffer stock market swings.
Then there are others who say they are expecting an annual return of over six per cent (or more!) but who are invested mostly in bonds producing returns that top out at four per cent or so.
Just like Oprah’s bra-fitting tips, you may benefit from some portfolio-fitting tips - but instead of cup and band size, you want to look at whether you are saving appropriately to your expected future needs, whether you are investing tax-efficiently, and whether the proportion of stocks or
mutual funds you have is balanced against the allocation to fixed income, and so on.
That’s secret number two - you need to take some time to consider how well your investments fit your life.
A version of this article was originally published at The Best Kept Secret: Toronto’s Resource for Women 40+.
Tags: advisor, Families, Home Economics, Investing, Retirement Planning, tax
No comments
Comments feed for this article
Trackback link: http://monkeysjumping.com/wealthy-baker/wp-trackback.php?p=126