I once spent three hours with a widow and mentioned putting her money into CDs at least a dozen times. Just before I was leaving, the widow said she had one question… “What is a CD?”
At a charity investment committee meeting I mentioned considering investing in Spiders – the nickname for an S&P 500 index fund – when one of the members asked me what a Spider was. A current issue of a popular magazine talked about not investing “too conservatively” in retirement. We assume too much and labels mean different things to different people.
Let’s take “conservative investing” for example. “Conservative” is relative to what the person knows, does, requires, can tolerate, and is understood by them in their terms. A 60-year-old that never invested in the stock market would think a 10% allocation in the stock market was not conservative, rather, on the edge of aggressiveness. An 80-year-old mega-rich person investing her portfolio for her grandchildren’s future wealth might think a 60% allocation in stocks was too conservative. It’s all personal and relative.
When doing anything – investing, discussing medical treatment, drawing up a will or power of attorney, planning for retirement or a child’s education, selling a business – ask questions, understand what is said, and then relate it to yourself to terms you can process. Many times, doing the wrong thing can cause you great harm. Doing nothing can only cause a lost opportunity.
If you have any questions, I am available for your questions at [email protected] or by filling out the form below.
Read More of the Partners’ Network Blog
How Can We Help?
