Growth Stocks and Retirement Savings

Diversification is a key element in structuring most portfolios geared toward retirement savings.  It is typically appropriate for a retirement portfolio to gradually become more conservative and less susceptible to volatility and risk as one approaches the retirement age at which the portfolio will be expected to start distributing income.  Even as a portfolio shifts toward an increasingly conservative asset allocation, growth equities can still play an important, albeit diminished, role in helping the portfolio to keep pace with inflation and to produce long-term capital gains.  However, investors should take care to recognize and understand the risk and volatility to which their portfolio is exposed, even by means of passive index funds like the S&P 500, as noted in this article.

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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management