One of the most popular rules of financial planning is that as you grow older, your portfolio should be more conservative. Although that maxim is largely true for the majority of investors, you shouldn't automatically draw the conclusion that many people jump to next: that you should own a bunch of ultra-safe bonds in your portfolio as you get close to retirement.
Underlying that general advice is something that's specific and unique to every single person out there: When it comes to saving for retirement, what you've done in the past largely defines what you'll need to do in the future. In particular, the less financially secure you are as you approach and enter retirement, the less you can afford to reduce your risk dramatically and still be assured that you won't run out of money.
Source: Motley Fool
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Posted by D4L | Friday, March 25, 2011 | ArticleLinks | 1 comments »________________________________________________________________
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You're right, sometimes the best defence is offence! It is important to have more than just bonds in your portfolio, even if you are close to retirement.