“Investment Strategy? We’ll Never Agree on That!”

Education can inform decision-making – Couples may lack a basic understanding of investing. Telling someone their feelings are wrong or should know more than they do is a losing proposition. Acknowledge the desire for safety or lack of experience someone may feel. Historical data showing returns of stocks over bonds despite higher volatility and the long upward trend of a balanced portfolio may comfort the novice investor.

Meet in the middle – If a couple disagrees about the percentage of stocks in an overall portfolio, It’s possible to blend investment preferences into a middle ground, combining an aggressive strategy with a conservative one. The result is a balanced or moderate investment approach.  If she wanted all stocks and he wanted all fixed income, a 50-50 mix of stocks and bonds might enable each to feel their preferences were taken seriously.

Take the holistic view – Most benefits advisors agree that using your 401(k) or other investment options for short-term needs is not advisable. Market fluctuations are a given; you don’t want to be in a position where you have to liquidate assets during a downturn. Employees concerned about near-term financial needs can consider more conservative options within their benefits package. On the other hand, investments aimed for long-term goals like retirement should be able to withstand market volatility. Employees should think about the timing of their life goals when choosing their benefits strategy. Opting for stable options for immediate needs is a wise choice.

Match strategy with cash needs – Most advisors agree that investing cash needed within a couple of years in stocks or intermediate or long-term bonds is not prudent. Market corrections are commonplace; you don’t want to have to raise cash by selling stocks at the bottom of a bear market. The person desiring security can legitimately seek a conservative investment for assets to fund near-term needs. Retirement assets invested for ten or more years should be able to ride out market volatility. Couples should consider the timing of cash needs in determining an appropriate investment strategy. Safety is a good attribute for near-term needs.