We know exactly where our retirement and savings funds are but we rarely think about whether or not they are where they should be! Well that changed this past two weeks as we started talking about where to invest the money I will inherit from my parent's estate (thanks Mom and Dad! I'd rather have you still around though.). That discussion led to creating a spread sheet of each different savings account, CD, bond or retirement fund with the associated rate of return this past year. Yikes.
We are conservative investors and pretty risk adverse yet we also know that inflation and taxes are currently nullifying what we are earning if not diminishing the principal as well. So we moved one retirement fund to a target date fund that is about 50% in stocks at the moment but will have a slowly decreasing percentage invested in them over time. That still leaves us with conservative investments overall and we know we missed the stock market party of the last few years. Sigh.
It is so difficult to balance all of the economic projections, our risk tolerance, inflation, projected longevity, etc. and make what seems to be the "right" decision. I know we are truly fortunate to have this problem but it is a problem none the less!
Still undecided as to the appropriate investment for my inheritance but I am leaning towards a target date lifecycle Vanguard fund to minimize annual fees and hopefully have a balanced investment. We never factored this money into our retirement financial planning so we are hoping it can sit and grow for at least most of the rest of our lives. It will be our self funded long term care insurance most likely.
How do you make investment decisions? How often do you review them? Do you look at your total financial picture before making changes or only at the specific investment?