Downsides of investing in stocks for retirement

The return from investing in stocks is one of the highest among different investment vehicles. But at the same time the volatility of the stock market brings more fluctuation to your return. Wealth management is not an investing game, and you should find the right way to achieve your financial goals.

Retirement plan and stock investment

For retirement plans, investing in stocks could be a way to ensure a stable cash flow for retirement. Take the US stock market as example, from 1972 to 2020, investing for 12 months could get a highest return for 58.83%. However, the lowest could be -43.32%, so there could be a huge variation in stock investment.

Then how about long-term holdings? Based on previous data, holding stocks for 10 years could also bring loss, and the lowest could be -3.51% annual loss. In fact, if you are not investing at the right time, even if you are holding stocks for 15 years, you could only get 3.64% annual return. 

Stock investment could be fluctuating, so a wealth management plan for retirement should be more diverse. Not only investing in stocks, but bonds and insurance can also be considered.

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Downsides of investing in stocks for retirement