Buy, Hold, and Sell!

Chapter 4The 10 Most Important Years of Your Investing Life

If you had a choice, would you rather lose a third of your money when you're 60 years old or 75? Now don't worry. I know you don't want to lose your money at any time. I've written this book in order to help you avoid losses, but stay with me for a minute. If you had to lose a big chunk of change, do you think you'd be better off losing it when you first retired or 15 years later?

I suspect many of you will lean toward losing it right away instead of later. You think, “Wow, it'd be really scary to lose a third of my investments when I'm 75. I might have medical bills, and it would certainly be hard for me to go back to work.” All true. It would be scary, and you would have a hard time recouping your losses. But in terms of your investments, you've made the wrong choice.

More Heavy Lifting

If you lose a third of your money when you're 75, it's still possible you could live the rest of your years on the remaining two-thirds of your investments and be just fine. To put it a bit bluntly, the older you get, the less work your money has to do because your life expectancy isn't that long.

The younger you are, the longer your life expectancy. Your money has to do more heavy lifting, because it needs to carry you for the rest of your life.

That's a serious issue, but it's not the only problem with losing money early in your retirement. You invest with the idea that you'll make money over time. If you lose a third of your money ...