Whether we like it or not, the value of our portfolios depends heavily on the behavior of financial markets, which, in turn, are intertwined with the economy. Therefore, how and where we invest are dictated in large part by our expectations of future economic growth. As the U.S. and other G7 economies slow, it's going to permanently change the investment landscape.
Article Category: Risk
With each and every investment that you make, you're going to be giving up one benefit in exchange for another. Most of the time, this trade-off is between risk and potential return. Understanding this trade-off at a conceptual level will go a long way in helping you to select the right investments (or strategies) on your path to retirement.
The unfortunate reality is that nothing in this world is certain. In fact, the only thing in life that is certain ... is that nothing is certain. This is especially true when we talk about money and investing. Since we can't deal with certainties, we're forced to deal with probabilities. Therefore, probabilities become the lens through which we must view all things investment related.
You've heard of the gender pay gap, but are you aware of the gender investing gap? Put simply, women do not invest to the same extent that men do. As a result, when retirement rolls around, women end up with only two-thirds as much money in their portfolios. This is a BIG problem, especially when you consider that women in the U.S. tend to live on average 6.5 years longer than their male counterparts.
Regardless of whether you’re a seasoned investor, or someone just getting started, it often helps to review the most basic fundamental principle that underlies all of investing: compounding. If you truly understand the power of compounding, then you recognize that beyond any other force, it is time that exerts the greatest influence on your investment portfolio.