The Drawbacks of Lifestyle Funds or ETFS

Lifestyle funds or ETFs offer advantages for many people, but they also can have unwanted repercussions or even leave you short of money in your retirement.

The concept of letting a manger handle your retirement account and allocate your investments based on your age sounds like a terrific idea… kind of like a one-stop, one-item market that fits all your needs. But does it?

The concept behind Lifestyle funds is simple: diversify your money into different stocks so your risk is spread out and then allocate it further based upon growth, stability and income producing stocks or bonds.

In this manner a young person would see his money going primarily into stocks or ETFs with substantial growth potential and a minor amount into income producing bonds.

A middle age investor investing in a Lifestyle fund would have his money spread out between growth, dividend producing stocks and bonds on an almost equal level.

A retiree would have her money primarily in bonds or other very secure stocks with high dividends levels so her balance remains stable while producing some, not a lot, but some income that at least comes close to or matches inflation. Of course, the actual balance of this account will now diminish as money is withdrawn to fund his or her life.

The danger with a lifestyle fund, in my opinion, is that you can actually end up short of money in retirement. Perhaps not at first, but as time goes by the Lifestyle ETF or fund is not growing, it is diminishing as you withdraw money while earning, hopefully an amount equal to inflation. But as we tend to live longer and longer, into our 80′s and 90′s, perhaps over a 100, a Lifestyle account that stopped growing, stopped holding growth stocks or ETFs when you first hit retirement age may run out of cash before we die.

Years ago, life expectancy after retirement was only 10 maybe 15 years, now we are seeing a retirement life that is approaching almost as many years as our “working life” span.

In order to be sure you have enough funds to support you in retirement an investment strategy needs to remain fairly aggressive for many, many years after you retire.

Obviously there are a number of ways to grow your retirement account and to keep it growing and viable throughout your life:

  • Use investment software to manage your account, even Lifestyle funds
  • Use Lifestyle Funds or ETFs
  • Retain an Investment Advisor

Using Investment software and self-directing your retirement account for safe profitable investing is something everyone is capable of doing as long as you have the desire.

Using Lifestyle Funds or ETFs can be the answer as long as you realize that you may have to pick funds that expire further out in years than when you plan to retire so your money continues to grow during your retirement years.

The other pitfall of locking into a Lifestyle Fund is that when the market declines the allocation and diversification may not protect you from major losses as the fund is ‘locked into its allocation’. In other words these funds rarely incorporate a Market Exit signal for when the market dives. This type of feature is something a good investment software program offers.

The choice of using Lifestyle Funds or ETFs is tempting as long as you understand the drawbacks. Monitoring them with an investment software program or a brokers evaluation system to compare one against another and against the market trends can help make these a viable choice for those with limited time to manage their future.

A Brief History of Home Entertainment

The concept of home entertainment and indoor recreational activities changed when home electronics invaded our lives. One can say that access to numerous electronic products at home has revolutionized the idea of what constitutes a complete home entertainment. Nowadays, anyone can have immediate access to every kind of electronic entertainment via different media within the comforts of their homes. They can have their choice of entertainment which may range from the latest DVD players, radios to the wireless internet connection which offers them the convenience of mobility. Advancement in technology has gifted us with loads of home entertainment options ranging from radio, television, CD, DVD players, home theatre system, games consoles and so on.Music has always been one of the most preferred leisure activities. It found its way into our home through the long playing discs and the gramophone. Of course with the coming of radio a decade later made music a more widespread home entertainment. Before the advent of the CD or DVD player, the radio was the most popular home entertainment system available. Though there were some juke boxes available in the local pubs or salons where one could listen to a song of their choice at home there was only the radio. With radio, the choice of listening was however quite limited as people had to listen to the songs that the radio channels would play, even though some of the stations would at times play the selected numbers based on listeners’ requests. But there were no complaints as there wasn’t anything better for decades to come.Initially, when television had not yet become an everyday part of our lives, the visual entertainment strictly meant those theatres which had large screens to view a movie. Things changed dramatically with the invention of the television in the initial phase of the 1950s. The television was a complete wonder in the days when it was discovered. People did not have to restrict themselves anymore to music as their only entertainment at home. They could actually watch a full length movie in the comfort of their own home.Not only movies, this small wonder box started entertaining people with more and more new ideas, programs and techniques. Television has been considered as one of the pioneers in the history of home visual entertainment. Of course it provided more than just entertainment. With news and special documentaries, TV soon became the most important source of amusement. The long playing discs were also a part of home entertainment which was an early discovery. While radios, LPs and television made a permanent place in everyone’s home, the quality of sound in those times essentially required tremendous development.Good sound systems and speakers stared to develop in the mid 1970s. Various technologies were discovered to enhance the quality of sound. And with the music genres like rock, pop and discos coming into being, there was a specific and urgent requirement for good quality sound systems. Thus the electronic giants did not stop producing recorders and put more emphasis on amplifying and equalizing the sound to give it a new dimension.Good quality sound systems were specially designed and created for homes which produced outstanding music. Woofers and subwoofers along with various amplifiers equalizers and multi channel audio were being used to produce crisp stereophonic sounds.However, this concept took a back seat when CD and DVD players came into existence. During the end of the ’70s and early ’80s some of the electronic giants worked in collaboration to develop the world’s first Compact Disc system. Experts proved that this CD player was quite compact and lightweight with its unique durability. For music lovers it was truly a boon. At the same time this CD system opened a new window in the audio equipment industry.Compact discs were more durable than any other long playing discs or tapes. Thus the CDs removed all other music disc and tapes from the market and held prominent position. The 80s and early 90s saw a vast improvement in the technology of compact disc systems. It became very popular with people because of the crystal clear sound it produced and was affordable. These CDs not only stored music, it was versatile enough to store movies, data, pictures or even software.Along with CDs a much improved device which actually revolutionized and changed the entire system of home entertainment is the DVD or digital versatile discs. These discs are powerful and large enough to hold two movies in one. It stores data digitally and is more durable. The scratch proof technology of the DVD players also makes the DVDs last a long time. Both music and movie buffs felt delighted when the DVD player came into the market. Recent survey statistics reveal that the DVD player is the most successful product of home entertainment. It was introduced in the year 1997 and has reached great heights of success ever since.Nowadays, people can have the same effect of a movie theatre in their homes. With the latest DVD players, LCD screens and the sound systems with woofers, sub woofers and multi channel audio systems, anyone can have a fantastic home entertainment system with high quality sound and spectacular visual effects. The plasma and LCD screens are high resolution televisions which started to develop in the latter half of the 1990s and these sleek televisions enabled the viewers to experience digital sound and vision with fantastic picture quality and various advanced features.With the invention of DVDs and a major development in the visual media such as Plasma and Liquid Crystal Display or LCD in the late 90s gave home entertainment its latest technical dimension. With it, the meaning of home entertainment changed significantly with more and more people installing the home theatre systems with newest gadgets and technologies.