As investors get older, their priorities may change in several ways:
- Risk tolerance: As investors approach retirement, they may become more risk-averse and less willing to take on investments with high levels of volatility or uncertainty. This is because they are closer to needing to use their savings and may not have as much time to recover from potential losses.
- Investment horizon: As investors get older, their investment horizon may become shorter. This means that they may be more focused on preserving their capital and generating income in the short term, rather than taking on long-term growth investments.
- Asset allocation: As investors get older, they may shift the allocation of their assets to be more conservative. This could involve increasing the proportion of their portfolio invested in low-risk assets, such as bonds and cash, and decreasing the proportion invested in high-risk assets, such as stocks.
- Income needs: As investors get older, they may have increasing income needs, such as to cover healthcare expenses or support a comfortable lifestyle in retirement. This may cause them to prioritise investments that generate regular income, such as dividends or interest payments.
- Estate planning: As investors get older, they may also become more focused on estate planning, including planning for the distribution of their assets after their death. This could involve working with a financial planner or lawyer to develop a comprehensive estate plan.
Overall, as investors get older, their priorities may shift to be more focused on preservation of capital, generating income, and planning for retirement and beyond.
