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SMART MONEY STRATEGIES FOR EVERY AGE AND SITUATION
Your 60s and Up—The Retirement Years

Section 2 of 11:
INVESTING:
What Should You Be Doing to Increase Your Wealth?
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This report will help you learn how to micro-manage your funds so
that your money multiplies itself.  Each section contains useful tips,
techniques and action strategies you can implement right away.

Read on and reap the financial rewards!

Jordan E. Goodman
America’s Money Answers Man
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INVESTING:
What Should You Be Doing to Increase Your Wealth?

Once you stop bringing home a salary, you might be tempted to
convert your investment portfolio from a broad mix of stocks,
bonds, and cash instruments to solely income-oriented bonds. That
could be the worst investment move you’ll ever make.

If you live for another 20 or 30 years, not only will your portfolio
have to provide you with current income, it must also protect you
against inflation. Someone who retired in the 1950s might have felt
totally secure putting all his or her money in long-term bonds
yielding about 3 percent. But over the next few decades, the
purchasing power of the money would have been devalued
considerably by rampaging inflation. Therefore, if you lock yourself into current yields by buying only bonds, your capital will not grow as it most likely will if you own stocks.

The best investing strategy in retirement is to assemble a
conservative mix of stocks, bonds, and cash vehicles that produces
enough income to live on but also grows in value over time. This
might mean keeping about 80 percent of your assets in cash
instruments, like money-market funds, and fixed-income assets,
such as Treasury, high-quality corporate, junk, and municipal
bonds; mortgage-backed securities; and the mutual funds that hold
these assets.

In assessing which bond fund is best, scrutinize expense ratios; the
greater a fund’s expenses, the less your yield. Bond funds should
have expense ratios of 1.3 percent or less, and preferably less than
1 percent of their assets—a figure you can determine by looking at
the cover of the prospectus or asking a fund representative.

Also, consider closed-end bond funds, which can offer very
attractive yields, particularly if they sell at a discount. Depending on
whether yields make it profitable, some of this fixed-income money
could be invested in CDs.

Invest the remaining 20 percent of your money in stocks or stock
mutual funds, which provide an inflation hedge. Most of these
stocks and funds should be high yielding so they give you current
income, as well as growth.

To find safe, high-yielding stocks, search such industries as electric,
gas, water, and telephone utilities; banking; oil; and insurance. If
you would like to have a bit of fun, invest a small portion of your
portfolio—perhaps 10 percent—in more speculative growth stocks.
Be prepared to lose some or all of this money, and don’t invest
cash you can’t afford to part with.

For a more diversified portfolio, buy mutual funds holding mostly
high-yielding stocks. Types of funds you might want in your
portfolio that offer growth potential and current income include
total return, balanced, flexible, equity-income, growth and income,
and convertible funds. You can buy such funds in either open-end
or closed-end form.

As the value of your portfolio changes over time, keep a proper mix
of income and growth components. For example, if the stock
market rises sharply, your equity portion may rise significantly
beyond 20 percent. Thus, you might consider selling some of the
stocks and reinvesting the money in bonds, which will produce
more income. If stock prices fall, you might buy stocks at bargain
prices with some of the income from your bonds.

HOW TO REAP THE REWARDS YOU DESERVE!

Starting Now . . .

Use the following Resources, Action Steps and Extra Info to take
the next step toward your solid financial future.

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RESOURCE | RESOURCE | RESOURCE
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Everyone’s Money Book on Stocks, Bonds and Mutual Funds
by Jordan E. Goodman

Understanding the vehicles for investment and changing markets can give you the edge when choosing smart strategies in changing times. Everyone’s Money Book on Stocks, Bonds and Mutual Funds will help you make sound decisions regardless of market movement…..

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