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Investing for Retirement in Every Market Condition

Successful retirement is dependent upon using an investing approach that performs in a wide variety of market conditions.

Part of successful investing is generating favorable results in good markets as well as bad markets.  Regardless of whatever your idea of retirement looks like, investors need a plan to get there in the first place.

Whether the financial markets are up, down, sideways, or soaring, investing your assets according to a plan increases the probability that the retirement you envision can become a reality.  As easy as it might be to be caught up in the daily newsfeed, the news should not influence your investment strategy.  If anything, the news should provide more motivation to stick with your plan.

Investors often chase the news or chase returns, but hardly ever chase an approach that will help bring about the results that they want. As a result, investors often miss out on certain market opportunities, or expose themselves to more risk.  But despite the prevailing market conditions at any given time, investors need the confidence to stay invested. 

The Market Cycle is Broader Than You Think

Most people only think of bull markets and bear markets when they think about the financial world and the stock market.  However, we at 4Thought Financial believe that the market cycle is more complex than one might think.  When it comes to thinking about how this affects your investments, it is more than just ups and downs. 

Simply put, market cycles are broader and more complex than one might think.  For example, 4Thought Financial believes that there are four primary market environments, instead of the two traditionally accepted bull and bear markets.  The bull and bear are joined by the “Eagle” and the “Wolf”.  The “Eagle” is characterized by soaring asset prices, markets at new highs and investor exuberance.  The “Wolf” is characterized by volatility, range bound price movement, and flat markets.  The recognition of this interpretation of market cycles is the key to understanding our process and how this relates to a comfortable retirement.

Investors planning for retirement must adapt their investment portfolio to prepare for these market environments.  Effective risk mitigation through a disciplined investment methodology will not only drive returns, but can help to do so regardless of what the markets are doing.

Different Asset Classes, Different Markets, Different Considerations

Investors often believe retirement is simply enjoying your golden years.  But today’s retirement picture must also address other concerns and needs.  For example, investors may need to utilize more of their retirement assets to pay for long-term care than expected. Investors must also think about other important considerations, such as outliving their retirement assets and inflation. 

To put inflation in perspective, a calculator from the U.S. Bureau of Labor Statistics showed that the same set of goods and services that cost $100 in 1980 would require $293 in 2016. 

Long term care and inflation are only two examples of considerations for investors planning for retirement. Importantly, assets must be available to address those concerns, and must be guided by a sound plan.

Having investment options that offer access to a wide variety of asset classes and strategies help retirement become an attainable goal, not a far-off dream.  By offering access to traditional stock and bond investments, along with liquid alternative investment options to hedge funds and private equity, investors have the potential to capture various opportunities in the market, regardless of what the market is doing.

Make Retirement Easier

Planning and investing for retirement should not be a challenge, nor should it be a chore to be feared. Regardless of whether you are a self-directed investor or would rather leave it to a professional, retirement just does not happen without a plan in place.

4Thought Financial believes it is important for the professionals aiding investors to not only develop the plan for their retirement assets, but also serve in the implementation of that plan through the ongoing management of investment portfolios that can help grow assets in tune with objectives. 

Learn more about how we help investors plan and fund their retirement and other life events.

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