It’s never too late for you to start investing, or build your portfolio of investments.
Whether you’re looking to invest or change your current investments in your 60s, it’s important to do your research and have a plan.
Unfortunately, there are many investment mistakes out there and they could cost you money!
Here are five investment mistakes you should avoid in your 60s.
1. Being unaware of the risks
As you near retirement and when you’re retired, you face a whole new list of investment risks. Not knowing the risks involved can lead to you losing money or making very risky and unwise investment decisions. According to AMP, while investment risks aren’t as critical earlier in your life, later in life they can be. This is because you have more time to recover your losses if you make a risky decision earlier in your life. When you retire or hit your 60s, you have less time to recover your losses. So what are some of the risks? Well, they include the timing of your retirement and investments, the market, inflation and when you choose buying and selling.
2. Not having a plan
If you’re spending more time thinking of spending your returns than actually planning your investment, than you’re doing it wrong. Apparently, studies have shown that people who create a written investment plan are more likely to have a better return than their peers. Experts advise that you must create a well calculated, disciplined plan – describing anything else as gambling and not really investing. They suggest you never invest based on predictions, expectations, hot tips or rumours.
3. Sticking to one investment
Not diversifying your investment is another major mistake you can make when investing in your 60s. It’s a great risk management tool, following the old saying of “don’t put all your eggs in one basket”. But financial experts say diversification is only a benefit if you’re planning on investing in a different risk profile, otherwise they describe it as “diworsefying”. For example if you have an investment in the stock market, you can invest in another market such as real estate, bonds or gold.
4. Not matching your investment to goals
When investing it’s important to look at what you’re goals are and whether the investment you choose will meet those goals. It’s important to understand that one size doesn’t fit all when investing. Just because one person makes money on an investment such as stocks or bonds, doesn’t mean you will. Maybe your best investment option to get the return you want is in real estate. Your investment journey is all about discovering what fits best with your goals.
5. Not enjoying yourself
You might think of investing as a chore, but that approach to investing could actually be one of the biggest mistakes you make according to experts. In fact, one online financial blog describes wealth as “isn’t a destination to be reached, but a journey to be enjoyed”. Apparently, if you stress over numbers, get confused and worry – your investment results can reflect a lack of enthusiasm. A blog on financialmentor.com describes investment as “a big treasure hunt”. “It’s like playing Monopoly for adults with real, live money where you get to make your own rules,” the author states.
Have you made any of these mistakes before? What other investment mistakes do you suggest people avoid?