June 6, 2002

• Lower your portfolio growth projections to 7-8%. The stock market has been sinking for over two years. So If you had a retirement projection done back then, we were probably using 9-11%. It's time to update that.
• Add fixed Annuities. New research has come out from Ibbotson that adding fixed annuities in addition to a stock and bond portfolio can extend the life of a portfolio. Many elderly were sold variable annuities with high tech funds and have lost substantial money. There are newer- no load, no withdrawal fee annuities out there from high quality issuers.
• Sell your losers- but only if there is a fundamental reason to do so such as a fund merger, change in management, change in investment objective, etc.
• Ladder fixed income- you do not want to go out too long in duration so keep it short term (5 years and less) and ladder (1 year, 2 year, 3 year, etc.) them for extra yield.
• Cut down on withdrawals from your portfolio. Cutting back on your withdrawal income during a bear market can also extend the life of a portfolio.
• Invest in asset classes that don't correlate with the US markets such as REITs (Real Estate Investment Trusts) and non-US stock funds. A weakening dollar has helped make international stocks look attractive after years of trailing US stock funds.
• Start saving even if you are retired. Now is the time to be buying. You will look back and wish you had.
• Do a Roth IRA Conversion while the prices are low. If your adjusted gross income is under $100,000, you are eligible to do a Roth IRA conversion. It will cost you a lot less to do it now and you will gain the tax-free income later at retirement from the withdrawal.
• Keep your eye on Total Net worth (Assets- Liabilities). Real Estate is going through the roof and is offsetting a lot of losses in investment portfolios. Keep that in mind. When some asset classes are going up, some are also are going down. It's the bottom line that counts.
• Check your risk level. Lots of people who said they could tolerate risk now find that they are not as comfortable with it as they thought. That means checking on Beta, Standard Deviation, and Sharp ratios.

1. Retire the word "retirement" - in the traditional sense - from your vocabulary.
2. Realize that retirement is a relatively new concept in human evolution. Only a few generations ago, before the industrial revolution and the advent of social security, the elders not only remained productive, but also were relied upon for their insight, wisdom and skills.
3. Restructure your priorities around what is most important to you.
4. Renew your zest for education. The learning cells of your brain are hungry for new and stimulating challenges.
5. Revitalize your energy by hanging out with like-minded people who are growing and evolving, rather than those who have "been there, done that."
6. Rekindle your spirit for taking risks. If you try something new and it opens new horizons, celebrate the discovery. If you fail, experience the gift of learning and move on.
7. Respond to new opportunities by keeping open to all that the world has to offer. You have a long way to go before realizing your full potential.
8. Recharge your body by starting a body movement habit. Walking, swimming, dancing, biking, yoga, etc. just a few times per week will make a difference.
9. Return to your childhood dreams and believe that you have time to live them, if they still feel right for you.
10. Remember that only you have the power and wisdom to recognize and act on your true passions.