Journey to retirement

Saving for retirement can be compared with a long sea journey. It might be useful to think of saving for your retirement like planning a 40-year journey on a yacht across wild and unpredictable oceans with changing weather conditions.

Give yourself a decent amount of time to reach your destination and set reasonable targets for your journey.

The later you leave your day one, the higher the percentage of your income you will have to save to reach your target, and the higher the investment risk you will be forced to take.

Maximise your chances of making your target by selecting a range of asset types, investing across a range of geographies and by investing across a range of investment styles and strategies.

When you select a fund manager you are not buying performance, you are buying a predictable style of managing money.

Investors have to understand why their managers are underperforming as the cycle changes, and be comfortable with this underperformance, knowing that it will revert in due course.

Understanding the drivers of performance of sectors and asset types is key to a multi-decade investment strategy.

Invest across a range of asset management companies and don’t give up half way. Also remember to check in with your progress.

Peter Nurcombe-Thorne – Rosebank Wealth Group