Page 24 - Waterfall City April Issue 2023

Waterfall City News

EQUITIES STILL TOPS

Six guiding principles when investing retirement savings in shares

By Wendy Myers, Head of Securities, PSG Wealth

E quity markets around is unique to each individual, as

the globe have taken
retirement is different for everyone. So
each investor needs to consider how
a knock recently. Yet,
although volatility tends
to make investors uneasy in the they wish to live during retirement.
short-term, shares are proven It is also likely that you will experience
to be the key contributor to several life stages in retirement. For
inflation-beating returns that example, scaling down on work by
assist investors in achieving their focusing on consulting or doing
long-term financial goals. part-time work, then retiring to
enjoy spending time with loved ones
Below I’ve shared six guiding principles or travelling the world, and finally
to consider when looking to invest settling into a more inactive phase.
retirement savings in shares. While These post-retirement life stages have
not necessarily an exhaustive list, the implications for your financial plan.
principles described in this article Wendy Myers Therefore, visualising your desired
are certainly top of mind to me when lifestyle in retirement is important, as
investing retirement savings in shares. it defines your financial needs.
Due to the short-term volatility of
1. Have clear goals equity returns, staying focused for the When considering shares, you
Goal-based investing provides long-term is critical when considering must also ensure that your pool of
investors with direction and meaning investing in shares. retirement assets includes shares with
for their investment efforts. Having high dividend yields. This income
goals in mind will make it easier for 2. Start with the end in mind will fund your retirement and help
you to make sacrifices or stick to a Once you have defined your goals, preserve your capital. Your financial
budget, as you know what outcomes the next step is determining how adviser is best placed to assist you in
you’re striving for, which helps to keep much you need to retire comfortably defining the right balance between
you focused. – in monetary terms. This amount dividend-paying stocks and growth
stocks. This not only enables you to
secure your retirement outcome,
but also to fund your lifestyle in
retirement.

3. Know your risk tolerance
‘Risk tolerance’ is the amount of
market volatility and loss you’re
willing to accept as an investor.
Determining your personal risk
tolerance is perhaps the most
fundamental step you can take in
deciding what types of investments
to make. Typically, the closer you get
to retirement, the lower your risk
tolerance will become. Weathering
short-term losses is possible if you
have decades left before you leave
the workforce. As you enter your
golden years, however, you would

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