MY ACCOUNT | NEWSLETTER |

Silver wealth and falling markets


Market corrections and bear markets worry all classes of investors. Still, retirees are particularly penalized if their portfolios lose value, especially when they are about to enter the decumulation phase. In the face of this harsh reality, being told to remain patient is probably not much comfort. What to do, then? While there are no easy answers, you can look to recent history to learn some lessons. Adopting proactive household cash management has proven beneficial in the past. Similarly, significant changes in asset allocation have historically resulted in investors underperforming relative to the broader market.

Here are 4 tips that have helped many retirees cope with and overcome past downturns:

1. Cut expenses. It is good to reduce your spending habits and thus avoid decreasing your savings. A possible approach is to divide the budget into needs, wants, and desires and then consider downsizing the two categories. Giving up superfluous expenses will allow you to have more time margin and allow investments to recover;

2. Streamline income and expenses. When withdrawing from several accounts, knowing exactly how much you spend each year can be difficult. To keep track of daily expenses, it is better to have a single account to converge all the different cash flows. This will make it possible to periodically check the account to make sure that the total amounts of expenses are in line with the financial plan;

3. Create a two-year cash buffer. For retirees, the income cycle involves the sale of assets (sale of shares, real estate, etc.) and cash withdrawals. This is suboptimal for senior profiles: in declining markets, liquidating a greater number of assets is necessary to create the same income because one is forced to sell downwards. Instead, it is necessary to establish the level of liquidity necessary for the following 24 months and consider the provision of this amount in a solution with very few fluctuations (e.g., money market);

4. Don't distort your asset allocation. Although selling may seem like a wise choice in times of difficulty on the equity and bond markets, completely exiting these asset classes to switch to liquidity could be wrong for at least three reasons. First, market timing is a futile effort (you need to know when to sell stocks and when to re-enter the market. If momentum is lost, yields can drop dramatically over time). Second, rising rates won't automatically imply that bonds are a bad investment. Finally, increasing liquidity is not cost-free and makes assets particularly vulnerable during high inflation.

Like1
Dislike0
  • Please enter a comment


Name *
Email address *
Comment *


* Required fields

Information on the processing of your personal data
We inform you that, in compliance with the provisions of current national and European regulations for the Protection of Personal Data and Services of the Information Society and Electronic Commerce, by sending us this form you are expressly giving your consent to Grupo Asís Biomedia , SL, (hereinafter, "ASIS GROUP") so that, as the person in charge, it may process your personal data in order to respond to your request for contact and information by electronic means.

Likewise, when you expressly consent, we will process your personal data to send you specialized information, newsletters, offers and exclusive promotions from GRUPO ASIS and related companies.

For the aforementioned purpose, GRUPO ASIS may transfer your data to other companies linked to GRUPO ASIS or to third party service providers for the management of electronic communications and other security services, even in cases where they are outside of the European Union, provided that they legally guarantee the adequate level of protection required by European regulations.

At any time you can withdraw the consent given and exercise the rights of access, rectification, deletion, portability of your data and limitation or opposition to its treatment by contacting GRUPO ASIS by sending an email to protecciondatos @ grupoasis.com, or by written communication to address at Centro Empresarial El Trovador, 8th floor, office I, Plaza Antonio Beltrán Martínez 1, 50002, Zaragoza (Spain), indicating in either case the Ref. Personal data and the right you exercise, as well as attaching a copy of your ID or replacement identification document.


I have read and accept the treatment of my data according to the informed purpose and according Legal notes and the Privacy Policy
I wish to receive commercial information from GRUPO ASIS and related companies



More news

Cases of Crimean-Congo haemorrhagic fever cases linked to tick bites reported in Europe

Like0
Dislike0

Outcome of surgical correction of medial patellar luxation in dogs weighing less than 10 kg

Like0
Dislike0

A retrospective study of the efficacy of zonisamide in controlling seizures in cats

Like0
Dislike0

Cystostomy technique for management of obstructive urolithiasis in small ruminants

Like0
Dislike0

Factors associated with thrombotic disease in dogs with renal proteinuria

Like0
Dislike0

Newsletter

 
 

News of interest

EVENTS

Copyright © 2024 - All Rights Reserved
ISSN 2768-198X

Top