Key Takeaways:
- Retirement Asset Revesting is a different way to invest only in assets rising in value.
- Retirement Asset Revesting controls risk and focuses on capital preservation so investors can keep their retirement and lifestyle.
- There are two different strategies: multi-asset and single-asset. Either can be used in any kind of portfolio, including an IRA or 401(k).
- Retirement Asset Revesting is an exciting option for those dissatisfied with the limitations of a traditional buy-and-hold investing method popular at firms like Fidelity or Schwab.
- Assets owned can include ETFs, futures, stocks and more.
What is Retirement Asset Revesting?
Retirement Asset Revesting is a proactive investment strategy that involves holding only assets that are increasing in value to help a retiree or preretiree protect capital and increase earnings. Retirement asset revesters actively monitor and adjust the investments in their portfolio by selling assets that are no longer appreciating or are starting to decline and reinvesting the money into assets that are rising.
The primary benefits of retirement asset revesting are to reduce account volatility while increasing and creating more consistent growth while stabilizing an investor’s emotional journey. Where retirement asset revesting really stands apart from the traditional diversified buy-and-hold method is that it can avoid downturns while profiting during bear markets and wild events such as the COVID-19 crash.
What is the Best Retirement Asset Revesting Strategy?
There are two types of Retirement Asset Revesting Strategies:
- Single Asset Revesting focuses on moving in and out of a single asset or a small group of closely related assets which move together, think gold, silver, and miners, for example. This strategy helps reduce risk and generates more consistent growth by actively trading an asset to take advantage of short-term price fluctuations. It combines technical analysis with risk and position management to identify trends in the asset’s price movement and mitigate risks. The primary goal is to protect against potential losses during corrections and bear markets.
- Multi Asset Revesting focuses on having a selection of uncorrelated assets such as REITs, bonds, and ETFs, called the asset hierarchy, and rotating capital into the best asset for the current market condition. This results in investors only holding assets that are rising in value, essentially providing a portfolio with consistent growth, and above-average returns while dramatically reducing portfolio volatility. This method is especially suited to those who are 50+ years of age.
Your Overall Time Horizon
When it comes to asset revesting during retirement, another important factor is the investor’s overall time horizon. A common mistake individual investors make is to assume that they will no longer want to trade once they are retired. In reality, a career as a revester (someone who uses the asset revesting strategy) can go well beyond retirement, and even life, when one has been saving for the next generation to provide a legacy for kids and grandkids. It’s a good idea to drill down and create time horizons for each individual financial or lifestyle goals. Luckily, retirement asset revesting provides a more steady income and growth profile, which makes this planning process easier.
What Assets Does Retirement Revesting Own?
Whether multi-asset or single-asset revesting, a revester’s portfolio can own a variety of liquid assets including indexes, stocks, bonds, currencies, and commodities. Using ETFs for these positions is helpful to keep risk and costs low.
Can Retirees Use Asset Revesting in their IRA and 401k Accounts?
The short answer is: absolutely! This is a flexible strategy, and while it is a different approach to investing, it uses traditional assets. That means you can use it in any portfolio, including an IRA or 401(k). Whichever account you choose to use for retirement asset revesting, it’s important to decide how to execute trades.
In recent years, automation has become a popular choice, with popular roboadvisors like Betterment and Wealthfront providing automated investing for individuals at a low cost. For those who want to practice asset revesting, however, these services won’t fit the bill since they focus on a traditional diversified buy-and-hold method.
A newsletter service like TheTechnicalTraders.com that provides email alerts with asset revesting signals complete with entry, targets and protective stops can offer an alternative solution. They also offer autotraded asset revesting in brokerage accounts using both the multi-asset and single-asset strategies.