Today, the stock markets in the US dropped-off a bit (the DJIA, S&P 500 and NASDAQ were down from 0.29% to 0.51%) after having reached the highest point in four years–back to where they were before we entered the Financial Crisis (toward the end of the Bush Administration), when Lehman Brothers went into Bankruptcy, on September 15, 2008. The three major European Markets (Germany, UK and France) were all UP, in the 0.50-0.75% range. Pac-Rim Markets were mostly mixed, ranging from -0.16% to +1.30%. Perhaps, more Smoke and Mirrors from the EuroZone!

So, why were the US Markets down? I believe that the real underlying theme was people taking profits after seeing their money grow (some 9.5% in the S & P 500) over the past three months. Remember that there are people who saw very substantial losses a few years back, especially if they invested more aggressively than they should have. It was kind of like the gambler who, after a big loss, puts everything on the table to get their money back. The securities markets, if you know what you are doing–or have good advice–certainly do have risk; but, they are not quite like rolling the dice.  The real risk, however, is just shifting everything into Cash–because (at today’s low interest rates), you will not keep up with inflation.

Let’s say that you have earned a sizable amount of your 401(k), IRA or personal accounts back since the 2007-09 Melt-Down. Re-assess your personal situation (certainly, you’re several years older). Include your anticipated Social Security and Pension Payments, if any. Maybe park some in Cash, and Bonds or Bond Funds, and continue on-going monitoring of your portfolio. After having retired in February, I have the time to check my portfolio everyday.  Not everyone can do that; but, at least be sure to keep in touch with it.

During the Financial Melt-Down, I had invested pretty much all of my personal funds totally in stocks and stock funds (or ETFs). Obviously, that was not something that I recommended to my clients; however, I did shift some assets into more defensive-stocks. A defensive stock or fund, would be one that invests in necessities: Food; Energy; Clothes; Health Care; etc. As I approached Retirement, however, I shifted to a somewhat more conservative portfolio.

If you work with a Financial Advisor, check with them to arrange a Portfolio Review. Include your Company-Sponsored Retirement Plan (if you have one–or more), as well as other securities accounts, annuities or cash accounts. Always look at the Total Pie as being your Retirement Nest egg. Lastly, every several years, you should reduce the risk in your portfolio, by a little bit–depending on market conditions at that time. Its like the train, gradually slowing-up, as it moves into the Station–Your Retirement.  Park it slowly.



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