Diversity Woman Magazine

SUM 2016

Leadership and Executive Development for women of all races, cultures and backgrounds

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d i v e r s i t y w o m a n . c o m S u m m e r 2 0 1 6 D I V E R S I T Y W O M A N 43 By Mindy Char ski W hat does the Labor Depart- ment say is likely to be the most expensive thing you'll ever buy in your lifetime? Your retirement. Tat knowledge can be shiver inducing, yes, but it can also be empowering. After all, it's a reminder that you can take steps today to grow your money for a distant, or not too distant, tomorrow. Here are nine tips to help you invest for the long term. 1 Take full advantage of retire- ment investment vehicles. "If you can, every single year, max out those retirement accounts," says Cary Carbonaro, author of Te Money Queen's Guide: For Women Who Want to Build Wealth and Banish Fear. And, when you're over 50, make a "catch-up" con- tribution. In 2016, for instance, those eligible can make a catch-up contribution of up to $6,000 into a 401(k) and up to $1,000 into an Individual Retirement Ac- count (IRA). Even if you can't contribute the maxi- mum amount to an employer-sponsored retirement plan, save enough to qualify for the company match. "Tat is free money," says Carbonaro, who is also managing director at United Capital of New York and New Jersey, a fnancial management company. 2 Don't play it too safe. Carbonaro has found that many women go too heavy in bonds or cash in the form of money market funds. Tat's a problem, she says, since by doing so they miss out on market up- swings and often see returns that don't keep pace with infation. "I think women are really afraid of the stock market in general," Carbonaro says. "Tey have such a more conservative view of the world, and they're so nervous about stock market swings." Do invest assets in the stock market and keep contributing to your retirement plans even when the markets get scary. "If the markets are going down, and you're adding into that bucket, well, you're buy- ing it on sale," says Cathy Pareto, president of Cathy Pareto and Associates, a fnancial planning and investment management frm in Coral Gables, Florida. 3 Diversify your holdings. Tough you don't want to in- vest too conservatively, you do want to reduce your risk by choosing diferent kinds of securities. "Te more you spread out your risk, the less your value will go down when the market goes down," says Laura Guerrero, a fnancial advisor with Edward Jones in Whittier, California. "We don't want to beat the market or even emulate the market, be- cause if we do that, then the risk is when it goes down, we're going to go down just as much." You want exposure to some stocks and bonds, since the two generally move in opposite directions. Within those, you want to have diferent kinds of asset classes. Tat may mean a mix of large, small, and midcap (capitalization) stocks in various industries, for instance, and bonds with diferent maturities and issuers. Likewise, don't hold too much of your employer's stock since it can present huge risks if the company or sector tanks. "If you are in a company, your biggest asset is your ability to earn at that company," THINKSTOCKPHOTOS Easy Street Is your retirement on track? Nine tips for investing for the long term. DW Life > Money Matters

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