Here’s something to chew on. It will take a few paragraphs, so I’ll split it between today and Friday.
This is the scenario. You’re 30 years old and you invest $10,000 for your retirement at age 65. You don’t know it yet, of course, but your returns are going to be exactly 8% in every year except one. In that one year, you will lose 30%.
First question: Assuming your goal is to have the most possible assets at the time you retire, is it better for that loss year to be early in this 35-year period or late?
Second question (begged by the first): In your actual retirement investing, do you care when the inevitable losses come – before, at, or after your retirement?
Give it some thought, share your views with me if you wish (click on “Comments” immediately below), and check back on Friday.
Larry Halverson: I've Been Thinking
Larry Halverson, CFA, Managing Director of MEMBERS Capital Advisors, Inc., is a veteran of more than 35 years in the financial services industry. Links: SUBSCRIBE TO: I've Been Thinking | 
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1 comment:
my answer would be later. Thinking in terms of a nontaxed ira where you are given the opportuinity to experience gains on your total contribution. This gives the contributor a leg up on increasing his/her investment prior to taxes being taken out when he/she makes a retirement withdraw.
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