Financial planning

​Considerations when investing for retirement

Investing in your retirement
Ability to predict the future with a high degree of certainty is the most critical feature of any retirement plan, and a retired investor will need to know that their pension or annuity income will last into the future.

In a market with over 900 unit trusts and numerous product providers, it is difficult to make meaningful and accurate predictions when consolidating all the available information. 

Whilst it may seem prudent to spread investments into a pool of different balanced portfolios across multiple managers, this action compounds the problem. 

The reality is that trying to predict the future will become infinitely more difficult each time a new fund is added. 

Furthermore, an exclusive focus on capital price will ultimately subject an investor to the vagaries of the markets and a future that could be quite different from the original plan or expectation.

A greater focus on the income produced by an investment gives one the necessary information to plan more effectively for the future. A characteristic of the income element of an investment is that it is far less subject to market volatility. 

There are certain companies that will continue to produce both reliable and growing income regardless of global slowdowns, exchange rate volatility and declining interest rates. 
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Issue 72