You often hear that it is best to startInvest your moneyAt a young age, so it is able to grow a remarkable amount over time.The case: The stock market has yielded an average annual return of 10% in the last 50 years according to the service of the S&P 500 index.At the age of 25 you would therefore give a balance of almost $ 729,000 in yourBroker accountIf we applied the same return of 10% to your 45-year-old investment window.
But the older you are, the more careful you should be when it comes to investing in shares.It's because once you're in the area orIn retirement age, The investments you have may act as an income source, so that you can pay your bills without having access to a salary.And you will not encounter a situation in which you have to continue to pay investments with a loss to access the money you need to pay your expenses.
That is why it is not necessarily the best choice to become in stock later in life.But if you are 65 and with retirement it is certainly not too late to invest your money.
The point is to have the correct allocation of assets
When you are 25, 35 or 45 and want to invest, it is actually a good idea to keep most of your portfolio in shares.To have to print this money.But when retirement is approaching, it is a good idea to change shares and go to less unstable investments, as bonds.
If you are 65 years old as such and are ready for the first time to invest, you do not place 100% of your money on shares.That's because you may need the money that is fast enough to pay for your living costs.
Bond values do not swing as wild as stock values.So let's say you have a portfolio that is evenly shared between shares and bonds.The value at all.In this case you would simply sell your bonds if the conditions are not good in selling shares.
You do not want to avoid fully shares
Even if you don't want to take too much risk in your portfolio later in life, it is generally a good idea to hold some shares.The bond section (which is likely to happen, based on how the shares and the bond markets have performed historically).
In terms of finding the correct percentages of shares, there is a rule of thumb that you can use to achieve your age of 110.If you are 65, take you to 45 - which means that you can consider holding 5% of your portfolio shares at that age.
Of course there is the WigGle room with this formula and it is really a way to get started.
However, the point is that it is never too late to invest your money.
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