Many people assume that trading during retirement is a desirable option purely because of the financial profits. Trading during retirement allows one ample time to keep up with financial news, potential stocks to pick up and general trading topics in order to plan and execute a solid strategy, and thus make the most of your investments. If this pursuit fits your personal interests and passions, consider the following compelling reasons to continue or learn to trade during retirement.
While successful traders are able to take in a substantial amount of money, many individuals stick with the practice due to the intellectual stimulation it provides. It is not uncommon for retired individuals to miss the challenges that come with a full-time career.
Corey Rosenbloom, CMT started trading in 1999 with his father and made the transition to the world of technical analysis in 2002. He is the author of The Complete Trading Course (Wiley, 2011) and maintains the website Afraid to Trade.
Corey relates how trading has given his dad the intellectual stimulation that he found himself craving after he retired.
The advantages of trading through retirement go beyond financial profits. Immediately after retirement, my father realized that he enjoyed the intellectual stimulation that his career provided. As a result, he found himself struggling with boredom frequently. My father had always kept up with the financial markets and his investments. He started watching financial television and studying prospective stocks to manage his portfolio.
When someone retires, it’s common for them to seek means of strengthening their bonds with family and friends that may have been neglected during a regular working life. Trading can be a fun, educational and valuable method of deepening the ties with those you love. Corey Rosenbloom also believes that trading helped him develop a closer relationship with his father.
My father and I rarely found common ground as I was growing up. However, our mutual interest in stock market trends and discussions of what was hot on Wall Street allowed us to form a bond which further increased my interest in the investing world. Eventually I grew to find active trading more interesting than long term investing which my father found fascinating as well. This led to me choosing to become a short-term trader and stock market analyst, which never would have happened without my father's support and encouragement.
One of the aspects of retirement that is appealing to many people is the opportunity to travel without the constraint of only a couple of weeks of vacation time each year that most jobs offer. Trading is a pursuit that you can enjoy at any time of the day or night from nearly any location with Internet access.
Mike Ser started his independent trading career in 1999 and has trained thousands of traders during the past eight years, and blogs about his experiences at MikeSer.com. Mike knows that people who have held typical 9-to-5 jobs for many years usually enjoy the chance to make money while working remotely and at their own pace.
Trading is one of the ideal professions that gives you the potential to make money every day. Retirement years provide the perfect combination of time and capital to focus fully on learning trading skills that can enable you to live quite comfortably. If you are good at this skill, you can fully enjoy your retirement years and still generate an income.
People who have spent many years in the 9 to 5 grind appreciate that trading gives you the opportunity to work any time of the day from anywhere in the world. Some people who have made the jump to trading full-time realize that they can enjoy their lives and freedom without being tied to a specific job location.
If you avoided taking control of your financial future during your working years, it is not too late to start now. Learning how to trade is a great method for taking control of your finances without having to take any big risks.
Jeff Pierce is a momentum trader who specializes in market timing. You can read his trading ideas and market analysis at Zentrader.ca, which offers methods for mastering the market with quiet fortitude and inner calm.
Jeff believes in the importance of taking the driver's seat when it comes to managing personal finances in retirement:
Learning how to trade is important because it puts you in control of your financial future. For some people, this is a scary proposition. Education is one way to eliminate this fear. Money managers can serve a key role for specific situations. However, it is important to keep in mind that what they do has a direct impact on your finances, and consequently, your future.
One of the biggest reasons that people are not successful with trading is that they are not realistic about its potential. Trading is not a get-rich-quick tactic. However, with a smart investments and a time-tested strategy, you can achieve consistent gains.
Rob Colville (aka the Lazy Trader) has been referred to as “the laziest trader to emerge from London's trading floors”. He is a fund-level trader who has used his original style to teach thousands of people from all around the world how to trade easily and profitably through his website Forex Training.
Rob believes that you need one tried and true strategy to be successful with trading:
Provided you have a profitable strategy and a winning attitude, trading during retirement can be a very efficient and lucrative way to steadily grow your capital over an extended period of time. If you are realistic about what trading can get you and don't treat it as a get rich quick scheme, all you need is one tried and tested strategy in order to achieve consistent gains from trading forex.
Trading is about much more than simply buying stocks and letting them do their thing. Actively managing a portfolio is key to long-term gains.
Martin Zourek is a DIY investor who invests in dividend growth stocks and trading options with the goal of having substantial income flowing into his account every month.
Martin has two key reasons that retired investors should learn to manage their portfolios actively:
One reason is the cyclicality of the market. The other reason is its volatility. To avoid losses, investors need to select an appropriate strategy. The 100 year history of the stock market has made it apparent that markets move in cycles of secular bulls, bears, and sideways trends.
Currently, we are in a sideways trend. If you bought an index fund in 2000, 10 years later, you would actually be losing money if you applied a buy and hold strategy. Even today in 2013, your account would be just 200 points above the year 2000 level. You would lose the whole decade. Selecting the right strategy can mitigate the negative effects of a sideways or downtrend market and its volatility.
Whether you have always had a passion for finance, but have never been able to pursue it, or you are simply interested in learning more about how stocks work, trading can be a great option during retirement. Retired individuals can fill their newly-found free hours of the day researching and trading. From hunkering down at home on a cold winter's day to enjoying a weekend at the beach in a Florida resort, you can trade at any time from any location. Give it a try today.
Please note: This information is provided only as a general guide and is not to be taken as official IRS instructions. Cogenta Computing, Inc. does not make investment recommendations nor provide financial, tax or legal advice. You are solely responsible for your investment and tax reporting decisions. Please consult your tax advisor or accountant to discuss your specific situation.