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financial modeling

Threats to Investment Success: Three Steps Toward the Right Path

In our conclusion to our series concerning major threats to your investment success, we’ll discuss key ways you can get your finances moving in a positive direction. For the full experience, catch up with our posts exploring sequence of returns risk and longevity risk and what they mean for your financial future.

As we’ve highlighted, your money can be negatively impacted by negative runs on the market. Outliving your returns is also a huge concern for those nearing retirement. The problem is that so many people do not consider these risks in planning for retirement. In all things, failing to prepare means preparing to fail. You should reassess your financial strategies and ensure you are following these three strategies to adequately prepare for retirement.

Implement a Financial Model

The first step to preparing for retirement is ensuring that your strategy is designed for success in any anticipated market environment. Determining the right mix, volatility risk, exposure to different markets, and more can all influence the success or failure of your investing plan. Strategizing these aspects can help you avoid devastating market volatility that can increase your sequence of returns risk, while still providing effective upside capitalization to grow your money at an effective and sustainable rate. This can be a difficult process and one that requires expert consultation to determine what strategy will work best for you.

Overcome Threats

As we’ve highlighted, sequence of returns risk and and longevity risk can be devastating to the financial stability of your retirement. Longer survival rates expose you to more opportunities for sequence of returns risk to take hold. A strong investment plan acknowledges these risks and plans accordingly for them, evolving alongside your needs and a shifting marketplace. Whether that means preserving capital or investing further in high-return opportunities is up for you and your future hacker to determine.

Eliminate Emotional Biases

The biggest threat to the success of your retirement is you. Emotionally-charged decision-making is a very real problem that can sap your investments of their momentum and lead to catastrophe down the road. Systematizing your investment through implementing automation and a strong financial model will limit the risk of you getting in your own way due to cryptocurrency “fear of missing out” (FOMO) or chasing returns that have already come and gone. In investing, there’s a lot at stake – that’s why you must proceed with a clear mind.

Ready to learn what you ideal financial model of retirement investing is? Contact us today to schedule a consultation to learn how we can hack your future together.