"I probably have way more than I should in safe things versus the stock market": I fear market volatility and housing prices. How can I find a balanced investment strategy at 41?

Hey Money Minder,

I’m curious about what most folks my age keep in a High-Yield Savings Account (HYSA) or Certificate of Deposit (CD). I feel like I might be playing it too safe, especially considering I’ll be working for a good while longer (at least 20 years if all goes well). I do dabble in investing – I max out my 401K, do backdoor Roths, and have a non-work brokerage account. Just to give you some context, I’m renting and not looking to buy a house. I’m single, no kids, and no plans for a family in the future. Debt-free over here! My monthly expenses are around $3500, give or take $500 – I’m terrible at keeping tabs on my spending. I have this big fear of the market crashing or housing prices skyrocketing, so I tend to lean more towards safe investments rather than the stock market.

Cheers!

Response from THE MONEY MINDER:

"Hello There,"

Hello,

It’s great to hear that you are already taking steps to secure your financial future by maximizing your 401K, contributing to a backdoor Roth, and investing in a non-work brokerage account. Given your current financial situation and risk tolerance, it’s natural to feel cautious about market fluctuations and real estate prices. However, it’s important to find a balance between safe investments and those that offer higher returns.

Considering you have no debt and your monthly expenses are around $3500, you have a good financial foundation. Since you don’t plan on having a family or owning a house, you might consider reallocating some of the funds you have in high-yield savings accounts (HYSA) or certificates of deposit (CDs) to a diversified investment portfolio that aligns with your long-term financial goals. By diversifying your investments, you can potentially achieve higher returns while managing risk.

One practical approach could be to work with a financial advisor to create a personalized investment strategy that takes into account your risk tolerance, time horizon, and financial goals. This way, you can have a well-rounded investment portfolio that includes a mix of stocks, bonds, and other assets tailored to your needs.

Remember that investing always carries some level of risk, but with a well-thought-out plan and regular monitoring, you can navigate market fluctuations and work towards building wealth over the long term. Keep in mind that it’s essential to periodically review and adjust your investment strategy as your circumstances and goals evolve.

All the best from THE MONEY MINDER.