Retirement Investment
HI Terry:
Help! I am a 68 year old retiree and widower with no children. I had just under $1.4M in my IRA at the end of March. My goal was to keep $1M as my nest egg and source of retirement income. The balance I was hoping to use to purchase property in Santa Fe NM when the real estate market dropped there (which it finally has).
Unfortunately I lost my nerve when the account fell under $1M the other week. Against my Financial person’s recommendation, I pulled everything and am now in cash. My thought is to sit on the sideline, watch the market fall when the horrible earning announcements are made, then jump back in.
Please feel free to scold me! Now what would you do.
Thank you,
Andrew
ps: Enjoy hearing you when you visit Joan Esposito on WCPT!
Terry Says
I don’t have to scold you; you’re doing a pretty good job of that yourself. That is why I have consistently urged people to have some “chicken money” on the sidelines — to give them courage to ride out a bear market. In this case, $400,000 in chicken money would have left your $1 million portfolio down about 15% at this point — and the cash to make a lowball bid on the property!
But now, that’s hindsight. I have absolutely NO idea what the market will do next. Please go to my website and see the latest column where two respected Wall Street analysts argue it out — one very bearish and one bullish.
Honestly, whatever I tell you has only a 50/50 chance of being right! So maybe set aside the chicken money for that home — and take it out of your investment consideration. Then take half of the remaining cash and put it into the market on a specific day of the month, over the next six months. Leave the balance in cash for potential future investment That way you’ll never be all right — or all wrong!
