Don't Abandon ShipFinancial Planning Insights Investing Behavioral Finance Retirement Planning
Even though the seas around us have become stormy with rising inflation, increasing interest rates, geopolitical events, supply chain issues, and wild stock market prices, we all still have to continue to sail our ships and continue to fund our future retirement income sources.
There is no doubt that the seas will eventually calm and the sailing will eventually become smoother. But for now, we must continue to sail the ship amidst the stormy conditions. It’s important to point out that for those of you who are still saving for the future, you are (or should be) taking advantage of the opportunity to buy shares of the world’s greatest companies at prices that are reduced from what we paid just 7 months ago. This means that for the same monthly investment you are buying more shares, which, when the seas improve, will increase in value more than the pricier shares you bought last year. Who doesn’t love a sale?
For those of you currently in the income phase of your retirement plan, there are still opportunities in this stormy environment. The dividend yield on the world’s greatest companies is now multiples of the government bond yield (as well as that of bank CDs) and could be an option for generating income at this time. And when the world economic situation improves (as eventually it always does) you could experience a bit of growth to go with your income.
Don’t abandon ship. Take action to steer your financial position to take advantage of this environment and to protect your retirement funds from future blows which are sure to come. Continue to get your finances in ship shape by reducing debt, increasing cash reserves, and continuing to fund your retirement accounts. Always try to keep the right mindset when volatile market conditions come to rock your retirement boat. Market timing is a losing game, a globally diversified portfolio will buoy you against the storm, and markets have always seen all-time highs after short times of stormy economic conditions.
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