How to invest according to your age?
Age is one of the biggest conditioning factors when investing and for each age, there are assets that can pave ‘the road to success’ in the markets. According to the experts, young people must assume the risk and bet on profitability and when approaching 60, the goal is to protect the heritage by sacrificing profits. Age and investment are directly related and choosing the right assets at each stage of life can generate optimal returns. The objective of the young investor is to increase the capital and risk in his investment to obtain a greater benefit, therefore the variable rent is the most indicated for him. While in the last stages of life the objective is to preserve capital and increase risk aversion. Older people renounce profitability in exchange for keeping what they have earned and it is logical that they opt for fixed income.
Distribution of Assets by Age:
From 25 to 35 years old: In this stage of life, investments should be directed to higher risk products because the young person has a long time to recover losses if an investment does not go well. That risk is justified by the possibility of obtaining more benefit.
From 35 to 45 years old: In this range, 30 percent of fixed income investment and 70 percent of variable income are recommended. This stage is characterized by having large expenses: mortgage, children, car and the investment capacity decreases. By assets, mutual funds and pension plans are the most appropriate, together with investment in the stock market.
From 45 to 55 years old: For this age range, increasing fixed income to 45 percent and reducing the variable to 55 percent. In these years, wages increase so that savings capacity is greater, and stocks and funds are the most convenient financial products for this age.
From 55 to 65 years old: It is a stage in which expenses are reduced and risk aversion increases as retirement approaches so it is suggested investing 65 percent in fixed income which is gaining ground, and 35 percent in equities. As assets, the bonds and shares are indicated.
More than 65: The disinvestment season begins to cover the expenses that cannot be paid with the pension. The sale of shares and the partial redemption of pension plans are frequent. The aversion to risk is great and it is recommended to invest 80 percent in fixed income and 20 percent in equities. in this age range you can get 2020 Medicare supplement quotes with https://www.medicaresupplementplans2020.com/quotes/
In fixed income, the investment is aimed at short-term products and fixed-term bank deposits where profitability is very low and risk too.