Most investors understand that stocks are a great and appropriate investment vehicle—if they have a long time. So complete this sentence: “If I’m about to retire, I have a ____ time to invest.” If you answered “long,” congratulations—that’s probably correct. If you answered “short” and you’re correct, it means you don’t have long to live and it is almost certainly a waste of your time to be reading this book. Go do something more important with your short time ahead.
For those still reading: Many folks in their late 50s and 60s—approaching retirement or already in it—have been coached by media and even industry professionals to think about their investing time horizons in a way that, in my view, is all wrong. Most people naturally think their investing time horizon ends when they retire, or when they stop contributing to their retirement funds, or when they start taking cash regularly from their portfolio. They think that’s when they should reduce most if not all volatility risk—getting “conservative.”

Longer Lives, Longer Time Horizons

In my view, that can frequently mean an unnecessary and sometimes serious reduction of quality of life later on. Why? Folks live longer than ever now, yet many invest, by and large, like they expect to die at age 70. Thanks to better nutrition and mind-blowing technological and medical innovations, folks just live to riper old ages today than even leading-edge thinkers fathomed 40 years ago. Recent IRS actuarial ...

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