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As you age, investments that have helped you build wealth over the years may no longer be suitable for your retirement goals. That’s when it becomes important to reevaluate your portfolio and shift towards strategies that prioritize stability, income and peace of mind.
GOBankingRates spoke to Michael B., a 67-year-old retiree who a few years ago abandoned investments that never made sense for his lifestyle. Here are the three investments he got rid of for a more secure retirement.
personal growth stock
Michael’s first move was to sell the Personal Growth shares he owned. Although these stocks have helped grow his retirement savings, the volatility became too great as he approached his golden years.
“Some days my portfolio was in the thousands, and other days it was down that much,” Michael said. “I didn’t want to spend my retirement constantly checking the markets and stressing about what the Fed might do next.”
Michael wanted something more stable, so replaced these stocks with index funds and exchange-traded funds (ETFs).
cryptocurrency
Like many investors who did not want to miss out, Michael had allocated 3% of his portfolio to Bitcoin and Ethereum. However, the extreme volatility made it unsuitable for their retirement goals.
“I didn’t want to miss out. I gave crypto a chance,” Michael said. “But at this stage of life, I value stability more than ability.”
They sold their crypto holdings and invested the funds in safe, income-producing assets.
Actively Managed Mutual Funds
Michael had some actively managed funds in his portfolio, but he realized that he was paying heavy fees for funds that were underperforming the market. Most of the funds in his portfolio had expense ratios above 1%.
“I realized I was paying more without actually earning more,” he said. “It doesn’t make any sense anymore.”
He switched to low-cost index funds, which gave him broad market exposure at a fraction of the cost.