Listen for a moment to the jingles of life. From bells of harmony to chimes of alarm, we are subject to the inevitable continuance of time. Fragments of the past commingle with present day occurrences as we attempt to forecast future events. You may physically stop a clock's swinging pendulum, but time itself advances.



Thus, we experience events with financial consequences: the marriage between two loves, the birth of a child, or the passing of a friend. Each time, we find it necessary to make financial decisions that not only affect ourselves, but others.

An investor may find age an important barometer in determining the direction and strategy of the portfolio. Generally, as an investor ages, less relevance is placed on growth of assets and a greater emphasis is placed on current income. The strategy may change over time from high risk to low risk as well.

Patterns develop as a career progresses. The early career stage is often defined as a time of high risk tolerance with a long time horizon. During this time, an investor places importance on growth and accepts volatility as a short term distraction to reach a long term goal.

The early career stage lends itself to a middle career stage where the investor attempts to find a comfortable stride. The career develops and growth still plays an important role. Risk tolerances may adjust lower. The investor also accepts more responsibility as he/she includes others into the plan such as a family.

The career peaks, as well as earning potential, and the investor enters into a pre-retirement phase. With less responsibility to provide for others, the investor may find this period to be the best opportunity to accumulate wealth. There may be a reduction in risk tolerances and time horizons as the investor looks toward a portfolio with greater income generation and possible tax efficiency.

The investor finally reaches the retirement stage. With successful and diligent planning over the past several years, fewer debt obligations and adequate retirement savings allow for a concentration on income producing investments while preserving wealth. Growth of principal may be a secondary goal to address the issues of inflation and the rise in the cost of living. Many find it appropriate to introduce estate planning and wealth succession into the plan at this time.

It is important to note, that not all investors experience each generalized stage. Some may stay on one stage for life while others may spend little time or even bypass certain stages.

As the biological clock of an investor's portfolio ticks, one must address several factors in addition to age. It is important to review factors such as the need for growth of principal, capital preservation, current income needs, tax efficiency, and health care. An adequate financial plan addresses your acceptance of risks and the returns you desire.

As an investor, try not to press the snooze button on your financial decisions and stay educated. Just remember, your financial plan does have a shelf life.