As people near retirement, I often ask them whether their life would change if their money doubled. For some people, it definitely would change their lives to double their wealth. If you got a late start to saving or had some hard breaks along the way, you might need your money to double to live the life you want to live.
Then there are the people who are already comfortable. Sometimes they stop to think about it and conclude that they wouldn’t spend any more money than they do today – even if they had twice as much money. I have a follow-up question for these people. Would your life change if your money got cut in half? For most people the answer is yes.
As you look at your portfolio value go up and down like a yo-yo the past two weeks, take some time to think about where you are at. Do you still need growth to meet your goals? If not, are you taking too much risk just because growth is fun?
We like to think that markets always recover. I think it’s more likely than not that this one will, but it’s not guaranteed. Just ask anyone who invested in Japanese stocks in the 1990s. There is always risk involved in stocks, even over the long term. How much of that risk do you need to take?
Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.
About the Author: John O’Connor
John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2020.