Investing Strategies by Age
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Investing Strategies
Pre-Career (16-25) – During this investment period in my life my goal is to have safety of principal while still receiving income. This is a very low risk portfolio strategy. Income will most likely be low because I will hopefully be enrolled in a post secondary education and graduate school. During this time I will be taking very minimal risks by investing in securities such as; T-bills, Canada, government and corporate bonds, stalwarts (blue chips), preferred shares, and possibly two or three small cap stocks in order to diversify my portfolio as well as incorporate some risk into it as well. Blue-chip stocks are very reliable and low risk because they are large companies with millions of assets and a great investment for this stage of my life.
Early Years (25-35) – This time in my life will hopefully be one where I am able to spend a proportion of my income on investing in order to grow my portfolio. Hopefully at this point of my life I will have a high paying job after graduate school and will have income to spend. Although cash would be tight when attempting to raise and support a family, the portfolio must be balanced as well. Therefore, having money equally spread out between bonds, blue-chip stocks, and small caps would be the best scenario to grow my portfolio as well as keeping the risk at moderate degree. I would focus on all five types of stocks that I have previously researched; yet I will still have less money in speculative and potential turnaround because the risk is quite high.
Establishment Year (35-55) – This is a very important investing stage in my life because I will have the money to be able to invest freely as well as be quite aggressive in the way I invest. The securities that I will most likely invest in are moderate to high-risk securities that can profit in high return. Investing in a few specified bonds for my possible childs education and for safety of principle. As well as some blue-chip stocks, and mainly higher risk stocks such as cyclical, speculative and potential turnaround. These stocks are the best for growing my portfolio, although they do pose a high risk, at this point in my life I will be able to afford the loss. The key to this time in my life is to use risk to my advantage and be able to receive capital gain and dividends.
Pre-Retirement Years (55-65) – This time period in my life will be much like the early years when I am trying to establish my portfolio, yet in this period I will have lower risk and attempt to have more safety of principle. I will want to have my portfolio steady so that I will have money ready for retirement, I at this time will still want some risk to be able to grow more, but I still want to be safe to ensure that I do not loose any large amounts of money. Again by investing in securities such as government and corporate bonds, and low risk stocks such as blue-chip and growth shares, I am financing myself safely and still having some risk involved as well. Having a conservative, balanced, lower risk portfolio will be the best for me during this stage of my life.
Retirement Years (65+) – At this time, I will be finished work and living off my possible pension and savings that I have acquired over my many years of working. All that I want out of the market in this point of my life is some security in T-bills, bonds and possibly preferred shares if a company is doing well. A key that I must utilize during this stage is that I do not know how long I will be around after 65 and I must have securities such as bonds that range over different lengths of time and few stalwart stocks as well. The stalwarts are necessary because they create an income flow for the consumer.
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