How to Build a Portfolio That Will Last Until You're 100
The idea of running out of money in retirement is pretty terrifying. If your income evaporates late in your retirement, your options for replacing it will be limited. And even if you manage to do so, spending your golden years scrambling for money isn't exactly ideal.
If you want investments that will keep on producing adequate income at least until your 100th birthday, you need to think long-term. The keys to a stable, lasting portfolio are diversification, smoothing out your income streams, and correctly balancing risk and return.
Diversification means choosing a wide variety of investments so at least one of your investments will flourish regardless of circumstances. At its highest level, diversification involves choosing investments from entirely different categories: stocks, bonds, real estate, commodities, annuities, and cash equivalents such as CDs. It's also important to diversify the investments within each category. For example, your bonds shouldn't all be treasury securities or (even worse) all issued by the same company. It's much better to have a wide range of bonds including treasury investments, high-grade corporate bonds, municipal bonds, and perhaps even a few junk bonds to bump up your yields.
Source: Fool.com
