Developing a Personal Retirement Investment Strategy

When considering different retirement investment strategies, it is helpful to arrange the strategies on a scale from capital preservation to capital growth. The primary goal of a capital preservation strategy would be to seek to preserve the value of retirement assets and reduce the risk of loss of principal, recognizing that the value of your investment may not keep pace with inflation. A capital growth strategy, on the other hand, would seek to increase the value of retirement assets, but with greater risk that your investment could lose all or part of its value.

Retirement investment strategies are therefore based upon the historical relationship between risks and return and there can be no assurance that these strategies will work the same or as well going forward as they did in the past. Thus, when considering your personal retirement investment strategy, it is important to fully understand the amount of risk a specific strategy might historically entail and whether that level of risk is acceptable to you. Developing an investment strategy is a personal decision and it is important to develop one that will best work for you. Of course, regardless of the strategy you choose, all investments involve risk and you could lose money.

ICMA-RC offers a variety of educational resources to help you make this decision.

• Our guide to creating your retirement investment portfolio can help you choose a selection of investments that reflect your retirement goals, your investment time horizon, and your comfort level with risk.
• Our Diversification: One Way to Reduce the Impact of Volatility article explains how creating a diversified portfolio is one way that investors can potentially reduce the risk of loss. By spreading assets over different types of investments, investors can seek to reduce the impact of negative returns from any one investment.
• Our suggested Investing Dos and Don'ts provide information about investing behaviors you may want to follow or avoid in maintaining the retirement investment strategy you've chosen for your goals.
• If you're in or approaching retirement, our Reaching Your Dreams Web site can help you find perspective on managing your investments during retirement, drawing income from your accounts, and making sure your savings will meet your needs. The Reaching Your Dreams site also provides information about other aspects of planning for retirement.

Past returns provide no guarantee of future results, but you may find reviewing past market activity helpful. Taking a look at historical data on the S&P 500 Index, for example, can reveal trends that you may want to consider when making investment decisions. The following information may be of interest:

• Changes in value of the S&P 500 Index
• S&P 500 Index Historic Calendar Year Returns 1926 - 2007
• The Cost of Losing the 10 Best Days of the S&P 500 Index

Still have questions? Feel free to contact our Investor Services team to further discuss your account and any questions that you have.