Here are 3 retirement investment “strategies” that will kill your returns and put your retirement goals in jeopardy.
If you’re headed into retirement, you’ve probably read about a range of different retirement investment strategies to follow. One we’ve been asked about a number of times is whether we can supply one last can’t-miss trading idea that can make up for the shortfall in savings (brokers sometimes refer to this as a “rescue stock”).
This, of course, is unrealistic. If we could find stocks with that rare combination of low risk and high potential, why would we ever recommend anything else?
In fact, if you’re heading into retirement and are short of money, you should move your investing in the opposite direction: aim for safer investments, rather than taking one last gamble. As well, here are three other examples of really bad retirement investing strategies:
First retirement Investment strategy to avoid: Stock options
Stock options are not a smart idea if you’re headed into retirement. Stock options are expensive to trade. You pay commissions each time you buy or sell stock options. Commissions eat up a large part of any profits you may make with stock options, particularly if you trade in small quantities. What’s more, every trade costs you money in “slippage,” or the difference between the bid and the ask price. With options, this difference is larger than it is with stocks. Continue Reading…