Excerpt: "Unless people prepare for it properly in advance, a perfect storm of demographic and financial trends could derail people's retirement plans, a global survey from HSBC Insurance finds. In its fifth annual Future of Retirement study, HSBC's It's Time to Prepare finds 9% of the 15,000 people it surveyed in 15 countries expect to delay their retirement because of the economic downturn and only 19% intend to retire as they had previously planned. Many are doing the opposite of what they should be doing: 17% are reducing retirement savings or have stopped saving for retirement altogether." (The National Post Company)
What should your strategy be for the long run so you do not allow the market to win, and keep you in the game? Dollar cost averaging has been the saving value for most people since it is simple and it works.
The market historically has highs and lows so that a $1 today buys a share of stock, while a $1 tomorrow can buy 2 shares or ½ a share. If you follow this strategy you gain market momentum which produces an upward trend line the same as when you look at the market over 10, 20 or 50 years.
The other consideration is determining your risk tolerance, changing that tolerance over time as you age to a more conservative position from a more aggressive position when you are younger.
If you study this strategy you will be certain of its success and less tempted to allow the market to dictate your be in or out of the market depending the markets ups and downs.
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