January 10th, 2014 |
Gerstein Fisher’s Chief Investment Officer interviewed on Marketplace Money
Gerstein Fisher’s Chief Investment Officer, Gregg S. Fisher, talks with Marketplace Money host, Carmen Wong Ulrich, about portfolio strategies for younger investors and soon-to-be-retirees alike and takes questions from callers seeking sound investment advice for their specific situations.
Below are some highlights from the interview:
On getting caught up in short-term market performance:
- If you’re going to be invested over the next ten, 15, 20, 30 years, what happens to the market in the next six months to even three years should not be your focus. Rather, get invested, stay invested, and stick to a well-thought out, diversified strategy.
- If you have shorter-term cash needs—you want to put a down payment on a house in the next 3-5 years, for example—some portion of that money should be invested conservatively, in liquid, low-volatility instruments.
- For longer time horizons (retirement funds), broad diversification and having the patience to weather near-term volatility are important. More aggressive investments are more appropriate if you don’t need the money in the short term.
On emergency funds:
- The key is to have enough set aside in cash and liquid investments that if a very negative scenario arises (i.e. job loss), you are not forced to sell your long-term investments to meet current income needs—especially in a down market.
- The right size for an emergency fund is somewhere between six months and two years’ worth of your living expenses in cash. If your income is very volatile, a larger fund may make sense.
On making financial decisions in retirement:
- Consider your life expectancy—a real risk many retirees face is outliving their assets.
- Buying a home in retirement may make sense if you think you’ll live in it for another 20 years.
- If your retirement plans call for a move, consider renting and living in the new area temporarily until you get a feel for your cash needs—they may be higher or lower than where you currently reside—and then you can budget accordingly.