What’s your risk cocktail?

You can meet your retirement planning goals, or you can play it safe. But you can’t do both. Everyone needs a mix of risk and safety.

Mr Hari, not his real name, is in panic mode because the market seems to be in chaos. He wants to dump his entire equity mutual fund portfolio and put all the money in safe fixed deposits. He’s decided he wants to play it safe.

Is he doing the right thing? What would your advice to him be?

Here are more facts. Mr Hari is about a decade away from retirement. To retire comfortably or to set retirement planning goals, at least 40% of his money needs to be invested in equity funds. Investing in debt funds is safer, but it would also earn him less. To meet his post-retirement comfortably, his investments need to grow at more than twice his withdrawal rate.

At the moment, his money is balanced perfectly between equity and debt. If he moved all of it to debt, he would run out of money seven years into retirement, because his withdrawals would exceed his growth.

At times like, a wise financial planner could do a great deal to reassure the client and remind him of the bigger picture.

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Most people look at the weather rather than the climate. The weather changes from moment to moment: the sky could look cloudy in the morning but be bright and sunny by lunchtime. Would you wear a raincoat, just in case, every time you saw a few dark clouds? If you went by the weather, perhaps you would. But if you reminded yourself that the monsoons were a long way off, or that it was still winter, then you might decide that you would just duck into a doorway and wait in case of a small shower.

At PeakAlpha, we help our clients take the long view.

The market fluctuates, exactly like the weather does. You might feel tempted to play it 100% safe and take zero risks if market conditions feel unpredictable or volatile. But a professional financial advisor would help you settle your funds at a level of risk that would have the  best change of delivering your retirement goals to you, despite the transitory ups and downs of the market.

In effect, what you need is a professionally designed, scientifically calculated, calibrated ‘risk cocktail’ that balances risk and safety, equity and debt, in a way that is perfect for your needs and goals.

If you have questions about investing for your post-retirement life, our award-winning financial planners  & Investment Experts are just a call away at +91 9945234304 .  Also, log on to www.peakalpha.com  to know more about independent financial advisors.


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