Your Age Should Influence Your Investing Style

0
517
How old are you? Your age should influence how you invest and what you invest in.
Age should influence your risk tolerance. Young investors between the ages of 20 to 40 years at the early part of their careers can afford to take higher risk in their investment choices. If you are above 50 with an eye on retirement, it is preferable to have a higher proportion of bonds and blue chip stocks with verifiable track record of performance in your portfolio.
Know the difference between a growth and income stock. Do I invest in growth or income stock is a good question when building your stock portfolio.  Growth stocks are stocks that give high capital gains but low dividends, income stocks give high dividend but low capital gains. Younger investors should have a greater number of growth stocks while older investors should have more of income stocks which are less risky.
 
Finally, be optimistic, but realistic. Buying stocks is risky but it can be difficult for people who are pessimistic and short term focused. Sometimes your investment decision would need some patience and optimism to realize returns.  Only optimistic individuals with power to hang on when everything looks down win in the long run.
Source; 101+tips to make you a smart retail investor, Anthony Osae-Brown.  Available on Amazon.