That safe switch into bonds can be expensive for retirees

The Ticker

July 30, 1999|By Julius Westheimer

MANY PEOPLE think that when they retire they should sell their stocks and go into something safer. But is that the right strategy?

Not according to Personal Finance. "Don't abruptly switch from stocks into bonds when you retire," it suggests. "Even though your parents and grandparents switched, life expectancies were much shorter then. You're likely to live 15 years longer than they did, and you'll need growth to keep ahead of inflation. Have a generous helping of common stocks."

Sheldon Jacobs, editor of No-Load Fund Investor, says: "Asia is again a hot investment opportunity. After years of turmoil, Pacific region countries are rebounding. Keep about 15 percent of your portfolio in foreign stocks and funds, split evenly between Asia and Europe."

WALL STREET WATCH: "Stay with a bullish allocation of 60 percent stocks, 35 percent bonds and 5 percent cash." (S&P Outlook)

"We caution newcomers about buying hi-tech stocks at these levels. Many have just gotten too high." (Smart Money)

"People are tempted to buy a stock or market sector after a period of scorching performance. That is precisely the wrong time to invest." (David Dreman, investment adviser)

Pub Date: 7/30/99

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