In a recent feature by Go Banking Rates, Mitch Reiner cautions investors in their 50s to be careful about making illiquid investments.
As retirement gets closer, many investors get concerned that they haven’t made the most of their portfolios. But be careful, irrational thinking can lead to some bad investments.
Locking money up for a long time period — more than 10 years — is a bad idea because it reduces access to an investment and increases risk, according to many financial advisors. Shorter time frames are most important in bonds since shortened maturities can reduce price volatility and improve liquidity.
Mitch Reiner stressed, “Illiquid investments, such as non-publicly traded energy investments, often boast of a great promise of yield and opportunity around oil wells or drilling pads,” he said. “But when these investments are not valued daily, and you have no understanding of the true economics of the business, you probably shouldn’t be investing your last dollars before retirement. These investments are not typically regulated and are highly risky.”
Additional Investments to Avoid In Your 50s Include:
- Real Estate
- Universal Life Insurance Policies
Read more about investments to avoid in the original article here.