What should you do if anxiety is getting in the way of your investment plan?
The article discusses the challenges faced by a cautious investor in their seventies who has moved their portfolio to cash and GICs due to anxiety over market fluctuations. Financial planner Sara McCullough emphasizes the importance of understanding the risks associated with bonds and the necessity of taking on some risk to preserve spending power. The piece highlights the psychological aspects of investing, particularly how inherited money can complicate decision-making.
- ▪The investor has shifted their portfolio to cash and GICs due to anxiety from market volatility.
- ▪Financial planner Sara McCullough notes that many cautious investors struggle with the emotional impact of market fluctuations.
- ▪The article emphasizes that to maintain spending power, investors need to accept some level of risk in their portfolios.
Opening excerpt (first ~120 words) tap to expand
ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountI’m in my early seventies, a disciplined saver and cautious spender. My husband and I have built a substantial nest egg, helped along by an inheritance. I opened a portfolio of 50 per cent each in stocks and bonds in 2021. Then came 2022 and, unfortunately, I sold. Everything is now in cash and GICs, safe and unproductive. Work income will cover our expenses for the next two years, but then we’ll rely on investment income. I’m thinking of a combination of 65 per cent defensive, dividend-oriented, low volatility investments, and the rest in something “stable” as a buffer. But I don’t understand bonds, and after 2022, I don’t trust them.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Globe and Mail.
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