While attending a recent wine tasting featuring several wines from the Tuscan region of Italy, the conversation around the table drifted towards investing for retirement.  During the table talk, someone shared that they had recently met with their financial adviser to reallocate their retirement portfolio into less risky securities such as U.S. Treasuries and corporate bonds.

Given today’s interests rates and relatively low coupon rates on most Treasury and corporate bonds, my initial reaction was that moving assets out of equities and into bonds may prove less than a wise move depending on ones short and long term goals.

The volatility the U.S. equity markets experience in late December 2018 was frightening for both smart money and retail investors.  When financial pundits and business media were proclaiming the end of the bull market and the advent of global economic recession, it is understandable why many investors “threw in the proverbial towel” and reduced their exposure to U.S. equities.

Dependent on ones short and long term goals, abandoning equities in ones portfolio of investments may be an incorrect move. If ones long term goal is to save for retirement in ten or more years, time in and staying invested in the equity market remains the best investment strategy for achieving above average returns while realizing below average risks.

Bottom line, to achieve one long term financial goals of retirement, time in the market is paramount.  From my humble viewpoint, reallocating one’s portfolio to lower return securities puts an investor at a greater risk of not meeting their long term retirement goals.