Investments to Retire on Time

I like to read the online edition of Investment News because its articles are targeted to professional financial advisers. I am my own financial adviser but it can’t hurt and may help to learn what others are thinking and saying. In a recent article, the subject was “10 Investments to Help Your Clients Retire on Time.”

Financial advisers are complaining because so many of their nervous boomer clients are pulling back from equities. Some of these advisers are going with the flow and finding suitable alternative investments. Others simply fire their clients because being heavily invested in cash is no way for a financial adviser to make money on a client.

So let’s go through this recent list of suggested investments that are supposed to help us retire when we had planned:

1. Gold. I’ve written a lot about gold. We are indirectly invested in gold through two different commodity-type mutual funds. I’m leaning toward adding a little more, probably through the GLD ETF.  My wife is in favor so we may make the move at the end of this month or on a dip.

2. IPOs. Even if you have the wealth to get in on them, investing in initial public offerings is too complicated and requires too much study and careful management. Not interested.

3. Water. I hadn’t even thought of this. There are funds that focus on companies that work in water resources. Too narrow for my taste. I prefer a more broadly-based natural resources fund.

4. Health Care. This makes sense for an aging population which is why we have owned a health care fund for many years.

5. Options. Hedging with options is a good strategy if you have the time to research and monitor each put and call strategy. I don’t right now.

6. Dividends. Four years ago I was a big believer in the “dividends for retirement” strategy. That was until the big banks started cutting them. Another problem is that the favorable tax treatment of dividends is likely to be changed, at least for us. So we are less reliant on this sector than in the past.

7. Emerging Markets. I agree with being invested here – and we are – even though this sector was really hammered in 2008-2009. But long term, you need this exposure in your portfolio.

8. Bond Ladders. I fully embrace the laddering strategy for Treasury bonds. We have been acquiring I-Bonds for a number of years and are working on TIPS as well.

9. Interest Rates. This is somewhat misleading. The discussion is about equity sectors that have traditionally benefited from rising interest rates. I favor exploring this area through inflation protection, which usually goes along with rising rates.

10. Closed-end Funds. You are supposed to make money here by finding and playing funds that trade at a discount to their NAV. Closed-end funds allow this. Too much work for me.

Here is the link to the full presentation. Enjoy. 10 Investments to help your clients retire on time

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My Related Posts:

1. The Gold Investing Dilemma
2. Should You Now Own Gold for Retirement?
3. Do You Need a Million Dollars to Retire?
4. The Case Against Buying Gold for Retirement
5. Improper Use of Target Date Funds