Retirees take Possible Risks when Moving to Income and Capital Preservation Focus

Retirees take Possible Risks when Moving to Income and Capital Preservation Focus

Retirees take Possible Risks when Moving to Income and Capital Preservation Focus

Krystine Lumanta, of Investor Daily writes –

Investors are overlooking possible risks when it comes to adapting investment portfolios as they approach retirement, Wingate Asset Management has claimed. The growing view that an investment approach skewed to income and capital preservation was needed when investors retire could lead to poor outcomes, Wingate Asset Management Chief Investment Officer, Chad Padowitz, said. “The belief that an ‘investment reset’ is needed is being further entrenched and confused by an increasingly bewildering number of retirement products coming into the markets,” he said.

And further on – “With equities, retirees should ask themselves whether now is the right time to be selling, especially with the risk of further cuts to interest rates and the impact this has on cash returns.

“Switching out of equities into very low return assets appears safe short-term but actually increases long-term risks for retirees.” Furthermore, dramatically changing investment styles could lead to a concentration of risks as many approaches relied on getting market timing right, which history has shown to be impossible, Mr Padowitz said.

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