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Start early, Retire early!

These are dangerous time for investors. Warren Buffet said that "a rising tide lifts all boats" but the corollary is also true: a falling tide reveals rusting bed frames and all sorts of toxic waste. Investments that seemed safe when everything was going well became doubtful when they were left high and dry. Falling tides also expose previously hidden wrongdoings and scams.

All signs right now indicate that the tide will go on falling for many more months if not years to come. Personally, I feel that the world economy is going to have a very tough and painful time in the coming two years as the excess toxic in the system is getting emitted day by day. It's a worrying state for all those faithful investors who have always listened to their market guru' s advice- "Stay Invested". There is nothing wrong in that advice, but it does not fit the bill for everyone. " Stay Invested " theory can be very painful or disastrous for those who are nearing their retirement age.

It's sad to note that people's retirement age is now controlled by the ups and downs of the stock market.

On the other hand, people who are still in their early 20s or 30s should continue to stay invested and continue to invest as their retirement age is still years away.

Should one diversify?, well i say first people should understand what is diversification. Diversification does not mean buying 50-100 shares in your portfolio, it is nothing but damage intensifier. Real Diversification means distributing/ allocating your investments �in different categories of Assets like Real Estate, Gold, Crude, stocks, bonds, index funds, etc.

Diversification may not be liked by professional investors, but majority of the investors are not professional and diversification can be a saving grace for them in troubled times like this. And as one nears their retirement age, one needs to systematically reduce their exposure to equities and increase their liquid holdings if they wish to lead �a non volatile life after they retire.

Just because the markets are coming down everyday does not mean one should stop putting money in markets. The lesson should be to start investing early in life so that they can retire early and also have a non volatile retirement.

Supreeth S M

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