Rather than following the herd, the independent, self-directed investor relies on good research and due diligence before taking a position. However, as you grow older, the objectives for those accumulated assets change. That means re-adjusting the allocation of your nest egg dollars to meet the changes that come with growing grayer.

That’s what you’re looking for. Substantial (and if possible, tax sheltered) growth. When you’re just launching your career, you have years of earnings to look forward to so you can afford to take the occasional flyer. You can afford to take on more risk in return for greater rewards because, if the higher risk costs you, you still have time to recover.

Of course, individual investing preferences come into play, here, as well. Risk-averse investors should stick with their gut feelings and invest conservatively regardless of age. However, at this stage in your investment career you can be more aggressive than you can when you’re 70.

There’s a mortgage, tuition, an expanding family and shrinking bedroom space. The real world presents a series of challenges for the middle-aged investor.

In general, a well-diversified collection of assets will serve most self-directed investors. Think of your asset basket as a pyramid comprised of three tiers. The bottom tier, also the largest, contains conservative, buy-and-hold assets – balanced mutual funds, bonds and other quality, “widows and orphans” investments.

The middle tier contains investments with a bit more risk but the potential for greater rewards. Quality mid-cap growth stocks, sector funds and other “juicer” investments that will, over the long-term, provide the long-term “oomph” in your portfolio.

The top tier, the apex, is also the smallest portion of your total allocation. A small portion of your assets can be placed in higher yield holdings, yet holdings that also put investment dollars at higher risk. It’s not a requirement, of course, but certainly an option for more aggressive investors looking at a 15 to 20 year time horizon before dipping into the savings. Micro-caps, hedge funds, currency trading and other high-risk high-return investments may be a part of a well-considered allocation of assets.

Investing in Those Golden Years

The older you get, the shorter your time horizon when it comes to investing. You may be looking at retirement in a few years or already living out your dreams of throwing out the alarm clock and who cares if there’s a traffic jam? You’ve got 18 holes scheduled for 10:00., the rule of thumb is simple: preservation of capital. Don’t lose any of what you have. So, the pyramid allocation shifts with more assets in the bottom, most conservative tier to preserve assets.

So, the lessons today? Don’t listen to the media pundits and adjust your portfolio as you age, placing a larger percentage of total assets into more secure investments to preserve your hard earned holdings for a very long lifetime.