When your goals or life situation changes, your portfolio may need to change too. Here are three illustrations of how your advisor might adjust your portfolio as your life changes.
You’re a couple with new short-term goals
When you begin to build a life with a partner, you may be able to invest aggressively with a focus on growth (equities) to build your assets. After 10 years, however, your life may be very different. You could have children, post-secondary education to save for, and plans to purchase vacation property. In this scenario, a more conservative portfolio, with a greater weighting of guaranteed and fixed-income products, can help you meet your needs.
You’re a single parent who receives an inheritance
As a single parent of a school-age child, you need security, and that means a conservative portfolio. But if you should receive a sizable inheritance, your future would be more secure, allowing you the opportunity to pursue growth more aggressively in your portfolio.
Your estate planning goals have changed
Upon retiring, you and your spouse designate a portion of your investments as an inheritance for your two children. You invest conservatively to safeguard the legacy. Now that your children are well established, you think it would make more sense to leave your money to your grandchildren. This change extends your time horizon, enabling you to focus on potential growth.
Any major change in your life may call for an adjustment to your investment strategy. Talk to your advisor when changes occur so they can make certain your investments reflect your evolving needs.