How To Define Your Investment Strategy

Unless you are retiring within the next five years, an aggressive growth strategy is often recommended to maximize your retirement savings. With a retirement strategy, when retirement is years away, consider keeping most of your money over and above your Emergency+Fund in high-growth investments. This means mostly stocks. But, if you're not comfortable with such an aggressive strategy (even though you don't plan to tap into the money for a while), temper it with bonds.

If you are planning for retirement but disability due to your condition is a possibility down the road, consider a more conservative growth strategy.

• One conservative idea is only to purchase stock in "blue chip" companies - larger, more solid companies with diversified holdings and a solid track record of growth and profitability
• Another alternative is to protect your equity investments against the downside by purchasing a "collar." A collar is a sophisticated financial strategy in which you purchase a "put" (the right to sell a security at a set price at a particular time) and a "call" (the right to sell a security at a set price at a particular time). This strategy limits your upside - more importantly, it also limits your downside Look for options in the time frame that work for you, such as one year. For a list of stocks with available collars, see: www.protectyourstock.com

For more on retirement planning, see: Retirement Planning

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