Is Diversification Going to Protect Me?
I am not a financial adviser but I did have investments that I saw vanishing before my very eyes, and it concerned me greatly. As a person with very little investment experience, I felt the need to search for satisfactory answers.
I always find it interesting that when you diligently look for something, the answer invariably appears, and so it was with my search. I was led to a book written by Robert T. Kiyosaki called Rich Dad's Prophecy. I had read Rich Dad Poor Dad a few times, but that was the only Robert Kiyosaki book I had ever read. I immediately purchased a copy and what I learned was one of the biggest eye openers I have ever experienced.
We are all aware of the cyclical nature of the stock market. We expect it to go up, down and sideways. However, in the long term we always expect to see a gradual incline. Normally, if we were to look at a graph covering many years, we would see an upward motion. We are seeing quite a different picture these days and it is a rather frightening situation.
The first of the 75 million baby boomers in the U.S. are going to be turning age 70 by the year 2016. The U.S. has a law on the books that states that when a person reaches age 70 1/2 they have to take all their funds out of their 401k. The time to pay 'Uncle Sam' will have arrived. Just think for a moment what that is going to mean.
Literally millions of people are going to be selling off their mutual funds and stocks, because the Government tell them they have to. It's so very simple....when there are more sellers than buyers, then the market goes down. When these baby boomers sell off their mutual funds and stocks, there are not going to be that many younger people buying, to balance the sales with purchases. This is a disaster waiting to happen. I suppose the Government could step in with an amendment to the law, allowing people to keep their money in their 401k longer, but then the Government would not get their tax dollars until much later.
Even though most people realize they are in financial trouble, they don't understand the full impact. The advice they are being given is to still diversify, sit tight and ride out the storm. A great number of them seem to be following that advice, but this is what Warren Buffet says about diversification...."Diversification is a protection against ignorance. It makes very little sense for those that know what they are doing".
It's not too late to get a handle on your finances and make some intelligent decisions. Seek out the education you need to fully understand your financial position and take action now, to secure additional funds to see you through your retirement. The experts tell us that a home-based business is one of the wisest choices a person could make, especially during this economic climate. It is well known that fortunes can be made during such a time. There are many great opportunities out there. Go and find yours and take action.
I always find it interesting that when you diligently look for something, the answer invariably appears, and so it was with my search. I was led to a book written by Robert T. Kiyosaki called Rich Dad's Prophecy. I had read Rich Dad Poor Dad a few times, but that was the only Robert Kiyosaki book I had ever read. I immediately purchased a copy and what I learned was one of the biggest eye openers I have ever experienced.
We are all aware of the cyclical nature of the stock market. We expect it to go up, down and sideways. However, in the long term we always expect to see a gradual incline. Normally, if we were to look at a graph covering many years, we would see an upward motion. We are seeing quite a different picture these days and it is a rather frightening situation.
The first of the 75 million baby boomers in the U.S. are going to be turning age 70 by the year 2016. The U.S. has a law on the books that states that when a person reaches age 70 1/2 they have to take all their funds out of their 401k. The time to pay 'Uncle Sam' will have arrived. Just think for a moment what that is going to mean.
Literally millions of people are going to be selling off their mutual funds and stocks, because the Government tell them they have to. It's so very simple....when there are more sellers than buyers, then the market goes down. When these baby boomers sell off their mutual funds and stocks, there are not going to be that many younger people buying, to balance the sales with purchases. This is a disaster waiting to happen. I suppose the Government could step in with an amendment to the law, allowing people to keep their money in their 401k longer, but then the Government would not get their tax dollars until much later.
Even though most people realize they are in financial trouble, they don't understand the full impact. The advice they are being given is to still diversify, sit tight and ride out the storm. A great number of them seem to be following that advice, but this is what Warren Buffet says about diversification...."Diversification is a protection against ignorance. It makes very little sense for those that know what they are doing".
It's not too late to get a handle on your finances and make some intelligent decisions. Seek out the education you need to fully understand your financial position and take action now, to secure additional funds to see you through your retirement. The experts tell us that a home-based business is one of the wisest choices a person could make, especially during this economic climate. It is well known that fortunes can be made during such a time. There are many great opportunities out there. Go and find yours and take action.
About the Author:
Jan Shimano was District Manager for Health & Welfare Canada for a number of years. She was also self-employed as a Nutritional Consultant. She is presently a Business and Health Coach and operates her own internet marketing company from her residence on Vancouver Island. Jan also invites you to drop by and visit her on YouTube at www.youtube.com/1jinny
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12:34 PM
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