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Switch from a dynamic to a defensive portfolio

Switch from a dynamic to a defensive portfolio

Money in a savings account hardly yields anything anymore. Anyone who wants to achieve a significant return must therefore look towards the stock and bond markets. That means: taking more risks. As long as you are young, your portfolio will still get rid of those dips in time. But the closer you get to retirement, the more you should be on the safe side.

With the wealth you have built up during your career, you should be able to maintain your standard of living after retirement. This means that your assets should not be overly dented and should be available at all times.

When you retire, you often switch from building up assets to gradually consuming those assets. In wealth planning, you must avoid having to sell assets at a bad time.

The percentage of shares that someone is allowed to have in a portfolio is equal to one hundred minus the age of the person.

Marc Van Goethem

Bank Degroof Petercam

A pension must be prepared in a timely manner. The tipping point for someone’s risk profile is five years before effective retirement. ”An old rule still appears to be maintained: the percentage of shares that someone is allowed to have in portfolio is equal to one hundred minus the age of the person. For someone aged 65, this should theoretically be a maximum of 35 percent. However, in the current market conditions of low interest rates, this can go up to 50 percent.

The percentage of your assets that do not go into shares can be partly held in liquid form. But you should keep that to a minimum. With a savings account you run the risk that you will lose purchasing power.

Bonds still play an important role in providing a person with a rentier income.

  • Gold and listed real estate

In addition to bonds, there is also room in the pensioners’ portfolio for gold and listed real estate. The aim is to achieve a diversified balanced investment profile at the end of the professional career.

If you are in retirement savings, it is advisable to spend around 55ste switch to a more defensive formula. If you invest in retirement savings through a fund, you can switch from a fund that invests a lot in shares to a fund that invests less in shares. In this way you avoid that a bad stock market year undermines the value of your fund when you retire. But if you do not immediately need the extra pension capital at the age of 65ste, you can wait until the stock market recovers to collect the capital that has been built up through a fund. Many banks have pension savings funds with different risk profiles and allow customers to switch to a more defensive fund at no cost.

A pension savings insurance policy offers more security than a (defensive) pension fund. If you are still more than ten years of retirement and are willing to take some risk, it is better to choose a fund than an insurance policy. After all, there is a good chance that a fund will achieve a higher return over that period than an insurance policy. But as your retirement approaches, you may want to consider switching to retirement savings insurance. After all, you can keep both a fund and an insurance policy. It is enough to save for ten years to qualify for the tax benefit. You must therefore start saving by your 55th birthday at the latest. You just have to decide each year in which product you save. For tax reasons, it is inadvisable to transfer previously saved sums from an insurance policy to a fund, or vice versa.

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