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  1. #1
    Many people won't touch the stock market with a 10 foot pole, as they've heard of people who have lost their shirt, etc. (or did themselves).
    You spent many years in school learning about a variety of issues about living, and you've taken training throughout your life in the school of hard knocks, so you've learned a lot since school days.
    You wouldn't go on vacation to a strange place without checking it out ahead of time - but many people spend more time planning their vacation than they do how to manage their money.
    Many haven't learned a lot about effective money management, however. How come - that's certainly an important part of one's life experience? I think that many people find it rather intimidating.
    Several years ago, about the time that I stopped part-time employment, at age 70, they had a personal financial advisor as a guest on a province-wide phone-in radio show on our national broadcaster that operates five days a week.
    I told him that, though many financial advisors recommend that as people become seniors it is wise for them to invest a substantial, and often increasing percentage, of their assets into investment where the value of the asset is very safe, usually stuff earning interest, where the principal is guaranteed, there were other legitimate viewpoints. The argument for it being that, should some of the principal be lost, it's almost impossible to replace it. That one should not invest in equities where one expects to need the money in the short term, etc.
    But that I disagreed.

  2. #2

    Investment concepts as a senior

    I figure that, at age 70, I want to fund my advancing years to age 100, as I prefer to be still able to eat, in a warm shelter, should I achieve that age.
    I consider that fund in terms of 6 blocks of five years each.
    As I don't expect to need 4 of those blocks during the first ten years, I feel that it would be wise to invest a substantial portion of that part of the asset into equities.
    Especially since, in Canada, if I buy stock in quality companies, which is the ones that I, as a senior, feel that I should use for most of my core asset, the dividends that they pay, though usually at a rate slightly below the rate of interest that I earn on guaranteed certificates, bonds, etc. (which is taxed at top rate) is taxed at a much lower rate - so I must earn about 4% on bonds in order to equal about 3% in Canadian dividends.
    Though the value of my stocks has fluctuated substantially over the past 40 years or so (I didn't have a mortgage, as I lived in a home provided by my employer in the early years), the general trend over a number of years has been upward.
    When I choose to accept the investment covered by the bank's highly-touted guarantee that they'll give me back every dollar that I lend them at the end of the contracted period, many don't pay any attention to the other guarantee that they never mention: apart from the rent on the money (interest) ... they won't pay me one dollar more at the end of the term, either. But the value of each of the dollars that I lent them has been eroded each year that they held it, due to inflation. If I gave them $10,000. on a 5 year contract, 15 years ago, and renewed it twice since, that $10,000. would have bought a decent car, 15 years ago. Not now. Prices have gone up - but the number of dollars of my principal didn't.



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