By the time you read this, we’ll know more about the huge stock market drop at the end of August 2015. We’ll be settled into the “new normal” (possibly) and continuing with our investment plans even after the reminder that our 401k’s and IRA’s and other retirement accounts are – or can be, extremely volatile. Always invest with that in mind, know your tolerance for risk and know your time horizon. If this is money you are going to need in the next few years, move it into safer investments such as government bonds and even cash. The loss in interest will be offset by the gain in stability.
Times like these are also a reminder of the need to diversify. Possibly have some of your money in real estate (your home is not an investment) and some in some other asset group such as precious metals or collectibles. Remember that these groups are not as easily disposed of when money becomes tight. We’ve talked about annuities in this column before and you know they have their good and bad points. It helps to find a good advisor and listen! The key as stated above is to know yourself and invest with your sanity in mind.