Let's begin by considering what you want to accomplish as an investor. Everyone has different financial needs and goals therefore, we are all investing for different reasons. One of the major reasons, regardless of income or goals, is that we want to ensure a more secure retirement.
As we live longer, many people are seeing their retirement last thirty or more years. Yet many retired investors want to take an extremely conservative investing position, with the thought process being that they are preserving their wealth. This type of investing approach will not outpace inflation and there is a possibility that, at some point during your retirement, there will be no wealth left to preserve.
The most basic reason to use investing as a means of saving for retirement is that, if you don't, you will most likely not have enough money to outpace inflation. In the chart below, the case is made that what your money can buy today will not be what it can buy twenty or thirty years from now.
So, as the value of the dollar declines over time, a wise choice is to invest your money in order to grow wealth and preserve your purchasing power.
To learn more on science-based investment strategies, contact Private Wealth Management Group.