We all know that the share trading market has peaks and troughs and that the difficulty in buying and selling shares is in the strategy or guesswork. Most of us, through our Superannuation, prefer to let the experts decide what shares to buy and sell in the hope that when we finally set sail for retirement we have a nice nest-egg that will see us through.
Whether you allow your preferred superannuation fund to invest on your behalf or whether you do the investing yourself (Self-Managed Super Fund SMSF) most funds will allow you to choose your own strategy when it comes to the investment portfolios.
Timing your retirement
History will show us that in investment circles there is loosely a seven year turnaround in the stock market with shares that blaze their way through the market (Bull) only to be tipped at some point and driven back to the depths of yearly lows. Then after some time up they come again.
As you approach retirement, particularly if you are planning to retire early, you need to take close stock of the market movement.
As you can see from the ASX All ordinaries from 1989 to 2012 there were some significant peaks and troughs and a huge correction in 2007 when the Global Crisis hit driving the stock market back below the averages. You wouldn’t want to be retiring around 2008/09 with a Growth portfolio would you?
So, as you approach retirement armed with the knowledge of share cycles you might want to consider parking your money in the Capital Guarantee portfolio for safe keeping and whilst in retirement or maybe keep a small portion in a Growth portfolio that you manage yourself.
Here is an example of my rolling profits over three years using my own share trading plan. If you have read my page on share trading I talk about my real/ paper trading (practice) journey with some terrific success. My retirement plan will certainly incorporate a small portion to share trading whilst investing the bulk of my investment into something safer.
What strategy are you planning on using?