Here’s Why You Can Never Be Too Old To Buy Stocks
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Here are a few reasons why stocks are a good purchase, even for older investors:
Many Stocks Can Bring Stability to Your Portfolio
Stocks are usually considered to be volatile and risky, but there are many stocks that are common and useful investments and can help your portfolio become stable.
Dividend stocks usually become a part of retiree accounts because their prices don’t fluctuate as much, and they bring income to the investor. Stocks of consumer goods companies also offer steady returns throughout the year. Retiring doesn’t mean you have to get rid of stocks entirely. Instead, find stable, income-generating stocks to help you during old age.
Your Entire Portfolio Doesn’t Have to Comprise Stocks
Purchasing stocks near or during your retirement is a bad idea if you haven’t invested in stable things like cash and bonds. Stocks can make up even less than 25% of your portfolio, but having some amount of these is advisable as they can help your money last longer.
Bonds and Cash Give Poor Yield Nowadays
Earlier, there were good returns on government and municipal bonds, certificates of deposit, and normal savings accounts. This helped retirement accounts get replenished with fresh funds.
Nowadays, the interest rates are quite low, due to which your spending rate may surpass the returns on your retirement funds. Stocks can help you get the kind of gains bond and cash once yielded.
You May Live Longer than You Think
Most people believe that as you move closer to retirement age, your focus should be on protecting your assets, not growing them. However, you will require your money to last for 30 years or more, and the only way to do that is to continue accumulating money. Having stocks can help you replenish funds that you spend from your portfolio.
Markets Don’t Stay Down for Long
The stock market may crash, but it always gets back up. There have been very few instances in history wherein the stock market stayed down for consecutive years. Additionally, more often than not, if you lose money in the market one year, you are likely to make that money, or even more, back in the coming years. If you’re a senior citizen, it is unlikely that your complete savings are going to go for a toss in one go.
