4 tactics to build an investment portfolio that supports your retirement wishes
Learn strategies to help you focus on long-term wealth accumulation, so you can fund your aspirations for retirement.
An increasing number of Australians are hitting retirement age, and more people are now seriously addressing the question of how they actually want to spend their retirement and how they will fund those aspirations.
If you already have investment strategies in place to cover your needs and wants, you have the capacity to grow your excess capital either for your own use later in life, to leave a legacy for your family or contribute towards philanthropy.
The strategies supporting the attainment of these goals should focus on long-term wealth accumulation. There is also scope to adopt less liquid strategies which are typically less suited to provide for shorter-term needs.
Below are four key tactics to consider when seeking to fund your long-term vision:
- High-growth long horizon strategy: Focus on the delivery of long-term compound growth without becoming too concerned with short-term price volatility.
- Unconstrained strategies: By taking an unconstrained approach, investors can capitalise on opportunities that would normally be ignored in the interests of not deviating too far from peer groups or benchmarks.
- Diversification: Diversification across high return investment strategies leads to more reliable growth and increases the capacity to sustain the strategy in a challenging market environment.
- Opportunistic investment approach: The investment strategy should be flexible to capitalise on emerging ‘blue-sky’ opportunities, anchored by medium-term trends and themes that have the potential to support wealth accumulation over the long-term.
As people approach retirement, income from wages, salaries and business activities tend to be replaced by income from superannuation, investments and/or government pensions.
There is a lot to consider when it comes to calculating how much you will need to maintain your lifestyle in retirement. It requires a comprehensive process where your individual circumstances and lifestyle expectations play a significant role.
While the whole issue of retirement planning can seem overwhelming, it should encourage contribution towards a more secure retirement, where income and capital growth will be adequate to meet you’re your essential needs and your discretionary wants.
About the author
Jeff Rogers joined AMP Capital in 2011 from ipac Securities, following its acquisition by AMP Ltd. He has over 27 years of investment management experience. Jeff holds a Bachelor of Science (Honours) from the University of Melbourne.