With the internet, smart phones, a variety of television news channels, and newspapers, it can be hard to escape the reach of the media these days. And paying too much attention to what the latest headlines are saying can leave your decisions being influenced by these sources.
According to CNBC, Ric Edelman, CEO and founder of Edelman Financial Services notes, “As emotional creatures, we tend to get very happy when the market’s up and very scared when the markets down. That causes us to buy high or sell low which is the exact opposite of what you’re supposed to do.”
While it’s difficult to deny that the media can have an effect on decision-making processes, I do my best not to let media hype rock my retirement planning world.
Gauging my comfort level
Personally, I like things with guaranteed or at least protected returns. Bonds, certificates of deposit, savings accounts, dividend reinvestment funds and the likes can provide not only security for retirement savings, but peace of mind. While they might not earn as much as certain riskier locations for retirement savings, they also typically aren’t as affected when media hype starts affecting the markets and people’s personal investments.
Investing softer, saving harder
Since I don’t like risk, this means I might have to save more to make up for lower returns through harder savings. My softer form of investing means that while media hype might not have as great an impact upon my retirement savings, my regular returns may not be as high as the returns of certain higher risk, higher return investments. This means that I have to work harder at saving for retirement. However, as a self-employed individual, this is easier said than done. With minimal extra income to put toward retirement savings, I have therefore made the move to extend my work timeframe to compensate for lower savings levels.
Dollar cost averaging
For the little bit of money that I can scrape together solely for retirement, it largely resides in a dividend reinvestment fund. While the amounts might not be cause to celebrate, I feel that this form of investment provides me with several advantages. First off, due to its stability – being invested in a variety of large cap stocks as well as bonds and cash – this fund is relatively safe from the effects of media hype compared to more volatile counterparts. Second, it helps someone like me, with less money to put toward retirement, continue to build fund value through dollar cost averaging monthly dividends that are reinvested into the fund, building share total without additional outside cash contributions from me.
In this way, I manage to avoid much of the volatility associated with media hype that could rock my retirement world while continuing to maintain stability in my retirement investments.
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The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.