Designing an Investment Strategy for Your Retirement Savings
Saving money is just the first step toward reaching your retirement goals. The next step: investing that money wisely.

Your savings might be well-served in a diversified mix of investments, and not left as cash — which may not keep up with inflation or grow significantly over time. A diversified investment portfolio of stock and bond investments, and potentially other types of assets, may allow you to generate returns on your savings over time and could help your portfolio weather the market’s ups and downs.

So, how do you develop an investment strategy for your retirement savings? Here are some key considerations:

Your Investing Horizon
How long do you have until you plan to retire and need to generate income from your retirement savings? Three years — or 30? That makes a big difference when it comes to investing.

Generally speaking, the more time until you need to withdraw money from your portfolio, the greater share of it you should keep in stocks and stock funds. That’s because while the stock market tends to see higher returns than bonds over long periods, it can experience volatility — or even a major downturn — over short periods.

On the other hand, if you have 20 years until you plan to retire, the bulk of your portfolio might be stocks and stock funds.

Your Personal Risk Tolerance
Some people are naturally more comfortable taking on risk than others — and it’s important to design an investment strategy that you’re comfortable with.

Your tolerance for volatility in your portfolio can affect not just how much you keep in stocks vs. bonds, but also how you invest within those asset categories. Moreover, alternative assets such as real estate investment trusts (REITs) — which invest in commercial real estate — metals like gold and silver and commodities may help you diversify, but they can also be more volatile than stocks and bonds. All said, it’s important to not let your emotions and fear of risk sidetrack your goals.

Your Plans and Goals
You should design an investment strategy tailored to your personal goals and spending plans. If you have big dreams for a retirement that’s decades away, saving more money now (while you’re still far from retirement) may help increase the odds you’ll have the amount of money you need in the future.

As you approach retirement, you should tailor your investing strategy to more concrete plans. For example, if you plan to make a big purchase — such as a new home or world vacation — early in retirement, you might set aside the money necessary to do that a few years in advance to ensure that money is available when you need it.

Everybody’s investing horizon, risk tolerance and goals are different. Your investment strategy should be tailored to your own needs. Let BOK Financial Advisors help you develop a strategy that can help meet your needs in both the short-term and the long-term.