Invest Like You Dress

     About a year ago my wife dragged me to Macy's to get outfitted for some new clothes. We were attended by a well groomed salesman who did a great job of selling me some new threads. I asked him what was currently in style and he gave me some timeless advice: "Buy clothes that are age appropriate for you".  Why should I care what the latest style is? I'll let the millennials worry about that. I just don't want to look like a rag-tag bum and be laughed at. As long as I am comfortable and look decent, I am happy. An investment portfolio should also be "Age Appropriate" and as individual as the owner. There is no "one size fits all" in investing. A person needs to be comfortable with their investments and not worry about them at night.  In general, as a person ages, the risk in their investments should be gradually eliminated so they won't be wiped-out by any market corrections. If you were to look at a graph of age vrs risk, where age is the horizontal axis and risk is the vertical axis, the slope would look like a toboggan run with the bottom of the hill in retirement age. Again, this is highly personalized. An example would be the funds that I manage for my mother who is 92 years old. I have lots of stocks, fixed investments like municipal bonds and CD's, and even some Master Limited Partnerships in her portfolio. Why should I take so much risk with my mothers savings? Two reasons: diversification and liquidity. I keep lots of cash on hand to pay her huge monthly costs at the nursing home and her holdings are diverse enough to insulate against any stock market shocks. I wish I could get a good return in federally insured bank accounts so Mom could get some safe income but that is not the case right now. That is why I have her invested in stocks that produce dividends and potential capital gains. The important thing is that I am comfortable with the investments for her situation. Just like wearing the latest fashions, chasing after the hottest stocks at this point in my life for me or my Mom would just not be age appropriate for either of us. We like steady businesses with a record of increasing dividends and below market valuations.