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It is very difficult to choose an investment mode for retirement pension plans. If you have 20 years to go before retirement and will continue to live for 20 or 30 years after retirement, you will have 40 or 50 years to cope with the inevitable ups and downs of funds in most investments and be more flexible in choosing investments.
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The most taboo for short-term investment is to take too much risk. If the investment fails, the money you want will be lost. When it comes to retirement savings, don’t be too crazy about it. The risk of getting it is almost inversely proportional to your mood. Take enough risks to get enough income, and live a long, long life with the money saved. Frankly speaking, it is not enough to rely on FDIC insured time deposit certificates alone.
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But if you can’t sleep at night because you think the income of your portfolio may decrease, you’d better keep your time deposit certificate. Just make sure you save a lot more than your neighbors who can take a little risk.
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Let’s take a look at these investment guides to ensure a smooth retirement.
- 1. Diversity is the key. The wisest way is to focus on investing in mutual funds and saving money for retirement. According to different investment objectives, the funds are classified one by one to achieve reasonable investment diversification. Saving money for the elderly by a type of fund is like relying on a fund manager, which is too risky. It is better to invest in five to ten funds, so that when you retire, each fund can easily save 100000 dollars. If there are more than ten funds, it will only make things complicated and will not make investment more diversified.
- 2. Select the growth equity fund. Growth equity funds invest in stocks, which are expected to grow faster than the market. But not always. When the market is booming, these foundations will appreciate quickly; In a recession, it will depreciate quickly. In the long run, the performance of growth funds is not the best.
- 3. Select value funds. The investment objects of value funds are stocks that have been judged by fund managers and have undervalued market values. They are expected to rely more on market adjustment than on their own performance appreciation. Although this type of fund will not rise and fall like the growth fund, there are also ups and downs.
- 4. Select the corporate long-term bond fund. If you are ambitious, you can even buy “high yield” bond funds invested in junk bonds. Junk bonds are debts that enterprises are considered difficult to repay. The yield of such bonds is quite high, and the loss is surprisingly high. Even for the “investment grade” bond fund, the “credit risk” caused by the issuer’s failure to repay on schedule or the “interest rate risk” caused by the rise of interest rate and the decline of bond price may still lead to depreciation, but to a smaller extent.
- 5. Select the medium-term government bond fund. The medium-term government bond fund invests in federal bonds and agency bonds with a maturity period of less than 10 years. This kind of fund has almost no credit risk. The interest rate risk is relatively small and the income is not much, but it is stable.
- 6. Choose the fifth fund according to your age and preference. It is better to select the fifth fund to be included in the investment portfolio. Those who dare to take risks and know that the price of the fund can fluctuate up and down can also sleep comfortably. They can invest in risk funds and improve the income of the investment portfolio. All kinds of special foundations focus on different industries, regions and countries. These funds often exceed the overall market performance in the first year, and fall behind significantly in the second year. People who are afraid of taking risks or are close to retirement can invest their pension funds in mature short-term government bonds within four years. The interest rate risk is very small, and there is almost no credit risk.
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Follow the basic method of comprehensive selection of five mutual funds and use Yahoo Mutual Fund Filter, you can combine your own risk tolerance to make a good portfolio and earn more income than time deposits; Remember: it doesn’t exist.