Managing Income In Retirement
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Hedging 7 big retirement risks

Managing Income In Retirement » Hedging 7 big retirement risks

Retirement risk No. 3: the market
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Retirement risk No. 3: the market

When you hear the word risk, the danger that usually springs to mind is market risk. That's the scenario in which you've amassed a healthy portfolio of stocks and bonds only to see it plummet in value because of a market crash or other disruption to the global financial system.

The solution: Diversify your portfolio among a healthy mix of stocks, bonds, commodities and real estate, with no outsized holdings in one company's stock. On the stock side, a portfolio would be allocated among several asset classes, geographic regions and companies of various sizes. It should reflect a combination of value, growth and dividend-paying investments. On the fixed-income side, it would be invested mostly in government and investment-grade corporate bonds with varying terms and durations.

"Diversification is one of those free lunches," Mervine says. "The more diverse a portfolio, the better."


 

 

 

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