Life Changes
"No matter how you decide to split your money, remember
that no allocation is written in stone. It's the privilege
of every investor to change his or her mind."
- Lorayne Fiorillo, author of
Financial Fitness in 45 Days
It's important to reassess your original allocations if your
personal circumstances change: for example, if you become
divorced, widowed, remarried, have more children than you
planned, or lose your job. To respond to these situations,
you may need to liquidate some of your investment portfolio
for emergency cash.
You may also find yourself falling short of your goals and
need to invest more aggressively to catch up. This may require
increasing your stock allocation to better position your portfolio
for increased growth opportunities.
Or, as you grow older and approach retirement, you may wish
to design a more conservative portfolio in order to protect
your investment earnings. This scenario may call for a lower
allocation of stocks and an increase in bond and cash holdings.
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