A commonly asked question by working people around the U.S. is “How much money should I have in stocks by the time I reach retirement?” A similar questions was asked by an attendee at the Oxford Club Private Wealth Seminar in Sante Fe. Alexander Green, the Oxford Club’s Chief Strategist shared his thoughts and advice with Investment U to help answer this question.
The first and most obvious answer is that it depends on the characteristics of the individual. There are variables which will determine the rest. Your age, your health, your monthly overhead, and your portfolio size will all play a part in the amount you should have. Alexander Green has a solution, “retirement rebalancing,” which will give everyone regardless of income a helpful solution. Green explains that there are always risks with investment, but there is a way to avoid risks and protect yourself when the market isn’t in your favor.
Green goes on to explain that everyone, regardless of their living situation, should have five years worth of living expenses set aside in their portfolio. The reason for this is that a bare market in the U.S. lasts 15 months on average, but the average decline is 32%. Then there is an average recovery time of 2.1 years. This makes the average recovery time 3 and a half years. However, he recommends rounding up to five years to prepare for a potentially longer recovery time. This way if your stocks are at lows, you can live off your reserves and avoid cashing them out. This is a viable solution that allows everyone, regardless of their living expenses, to live off more than just their pension, therefore retaining their quality of life.
The Oxford Club is a group of international private investors and entrepreneurs that has a goal of helping their members obtain and maintain wealth. The Oxford Club boasts more than 157,000 members across the globe and have been assisting them for over two decades. Regardless of the market condition, they strive to share only the best opportunities with their members.
The private investment group was founded in 1989 and was created with the idea that the best investment opportunities are usually found through personal connection. They launched their website Investment U in 1999, one of the first websites to provide financial education. To this day The Oxford Club seeks to help people find liberty through wealth.