Of course, every personal situation is different. Sanchez says people approaching retirement should consider being more conservative with their investments.
“If you’re within five years of retirement, hopefully you’re already converting your portfolio; the transition to a more conservative portfolio, where you’re not 100 percent in a stock or stock market, maybe 25, 35 percent, so you can get through that,” Sanchez said.
Armijo says retirees who plan to use investments to help fund retirement income need a plan to make sure they don’t come up short.
“That’s the No. 1 factor we see in retirees: Not enough money,” he said. “For young people, start investing and planning now, and when you can, increase the amount you’re investing.”
According to Sánchez, it’s always a good idea to take a look at the household budget, especially for those on a fixed income, such as Social Security.
Is there anything to cut? Can you eat out less and brown bag more? And don’t be afraid to negotiate.
“Call your cable company, your phone (company),” Sanchez says. “See if there’s anything you can negotiate with them to lower your prices and give you some cushion.”
This includes insurance companies, who can find you a lower rate.
Aside from “playing” stocks, there are other ways to invest your money.
“Boulds, CD (certificate of deposit) savings accounts, money market accounts and more,” says Armijo, adding, “Investors can look at fixed annuities and indexed fixed annuities as an alternative and safe investment” .
“There are tens of thousands of different types of investments, and certainly safer investments,” according to Sánchez. “Cash is probably the safest, but with inflation, your dollar probably doesn’t buy as much and you don’t do anything with it.”
If you have extra cash lying around, there are opportunities. Sanchez suggests considering buying more stocks when the market is down.
If you invest through a business account, Armijo says you’re taking advantage.
“Increase the amount you’re contributing if possible to align with wage increases. Also take advantage of employer matching contributions because it’s free money!
The bond markets and certificates of deposit, CD’s, are consistently reliable and stable investment resources, although generally without great returns. But they can also be affected by the rise and fall of interest rates, which the Federal Reserve has been raising to fight inflation.
“With a rising interest rate environment,” Sanchez says, “you don’t want to lock yourself into a five- or 10-year CD because you’re locking yourself in when the rate is low.”
Ultimately, investors should ask the tough questions, Armijo says.
“What are your financial goals? What is your risk tolerance? Anticipate a need for liquidity (or cash on hand?)
Sanchez recommends finding a financial advisor you’re comfortable with, keeping a close eye on your investments, and staying calm during financial rough patches.
“I strongly believe that we are a very resilient nation,” he said.