Patrick
Full time employment: Posting here.
I've become the semi-pro financial advisor at work for about a half a dozen people who are nearing retirement (2-5 years), semi-pro cuz I'm "semi-paid" . Over the last couple of years I've gotten them out of crappy variable annuities and overly risky investments with high fees and costs and into Vanguard funds - principally Wellesly and Wellington. The other day when a couple of them were concerned I was able to show them where they would have been compared to where they are and they felt a lot better. That bond and dividend aspect really helps smooth the bumps out and keep them calm, too. I've got another friend at work who despite wanting to retire in 5 years is still gambling on the high risk end of the market. I've got her to agree to meeting with me to change her allocation and put future contributions into less risky investments, and now I'm working to move her existing portfolio into a more conservative alignment. Problem is, with the huge drop recently, I don't want to "lock in" losses.
How do you compensate for the risk of the declining dollar, inflation, and reduced purchasing power over time?