Part of a successful retirement is investing. Don't let investing regrets now sink your nest egg later.
Today, MoneyTips.com is releasing its free ebook, The Retiree Next Door. This ebook is the result of a research effort that was underway over the course of the summer. The idea was to look at current (and successful) retirees to find out what makes them tick.
There is a lot of good information in this ebook, and the survey results can provide you with insight that can be of use as you plan your own retirement investing.
In addition to offering quantitative information (like 10 percent of those surveyed wish they had started sooner), The Retiree Next Door also interviewed subjects for qualitative answers. Some of these answers were more interesting to me than the dry numbers.
The investing regrets that some of the respondents shared provide insight into what you can avoid now so that you don't end up sabotaging your retirement.
Three Investing Regrets to Avoid
First of all, it's worth noting that, among The Retiree Next Door Respondents, 53 percent cite stocks as their best-performing assets. That's worth noting, since many people worry about investing in stocks. However, investing in stocks doesn't need to be complex, and the investing regrets related to stocks seem to all have to do with?not?investing. Here are three of the investing regrets that stood out to me as I read this report:
- “Getting into stocks too late”?The sooner you invest, the more time you have for compound interest to work in your favor. Even successful retirees recognize that they would have been even?more successful if they had begun investing in stocks much sooner. It's possible to start investing with as little as $25, so don't wait. Start investing now, and your wealth will build faster.
- “Getting out of the market when I experienced my first downtown”?Too many of us give into panic during a downturn. However, this the exact wrong time to sell. I buy more when the market is down, since everything is on sale. However, it makes more sense to stay in if you are investing in index funds or index ETFs, since you can purchase shares at a low rate and then take advantage of the overall market recovery later. You don't need to pick a single “right” stock. Instead, consider using index funds and index ETFs to put together a properly diversified and asset-allocated portfolio.
- “Investing in the company I worked for” While it's not the end of the world if you buy some company stock, you need to be careful not to keep too much of your portfolio in your company stock. There's a reason that there is a diversity mantra in investing, and there's a reason that index investments are growing in popularity. Pay attention to your holdings, and make sure that you have only a small amount in the company you work for. You don't want your retirement future dependent on your employer's stock performance.
Investing is a smart play over the long haul. It gives you the chance to put your money to work for you. Over time, the compounding returns can add up to a tidy nest egg that provides you with financial success.
Don't fall prey to investing regrets that can hold you back. Instead, get a little more information about what it takes to retire successfully, and learn more about how you can put your money to work for your.