Carnegie Investment Counsel Blog

What Should I Do with My Portfolio in My 20s, 30s and Beyond?

Posted by Shams Afzal, AIF® on Oct 27, 2020 1:30:00 PM

What Should I Do with My Portfolio-1

While some investing wisdom is timeless and can be as simple as “save early and often,” behavioral finance shows us that the best advice is one that can be followed and adhered to long enough for it to deliver. 

Priorities in one's 20s are and should be different than those in one's 40s and beyond. 2020 has put a wrinkle in even the best laid plans and added other layers of uncertainties to be taken into account for both short- and long-term financial decisions. Here are some steps to consider in the different phases of financial life.


The Promise of the 20s

Outside of bulge bracket employment in Silicon Valley, Wall Street and other rare launching pads, young savers are likely to find themselves in lower tax brackets just starting out. After-tax investing in Roth IRAs should be prioritized during these years due to the potential of five decades worth of tax-free growth. With maximizing your Roth contribution up to the limit of $6,000 per year, it can become a substantial capital resource at retirement. Pre-tax investing in 401(k)s or other retirement plans should go hand in hand with at least 5% salary deferral rate. 

Given the unique circumstances of 2020 which is accelerating adoption of everything digital, for people in their 20s, further care should be taken to ensure that investments prioritize growth-oriented companies over those that pay out most of their annual profits in dividends. High dividend payers generally indicate industry maturity and low potential for growth.


Stability and Professional Growth in the 30s

The 30s are generally marked by stability of career, expertise-building and growing families. Competition for discretionary dollars can be intense, from a mortgage, children and other responsibilities. This is the decade, for most people, when seeking out mentors can be key to personal and professional development. In some ways, most adults set forth their career trajectories during this decade of their lives. With a few promotions and salary increases in the bag, 30-somethings should be targeting setting aside at least 10% of their salary monthly into their retirement plans along with sustained funding of Roth IRA accounts. Investing for growth rather than safety of principal should remain the primary focus.


Accelerating Net Worth in the 40s and 50s

The 40s and 50s share similarities in terms of their ability to provide clarity of path, and perhaps, purpose in one's personal and professional life. It is likely that this period, endearingly called “middle age,” manifests its mark at the upper level of Maslow's hierarchy, where an individual graduates away from needs and wants paradigm to some form of self actualization. In practical terms, the combination of monetary rewards of professional expertise and maturity while approaching empty nester status, make these years elemental for future financial stability and retirement readiness.

Maxing out retirement plans along with sustained funding of after-tax accounts during these years is a must for those looking to supercharge their retirement goals. Special care must be taken to ensure that new found discretionary income meets personal budget discipline.

The 40s and beyond are years where lack of professional financial advice can be extremely costly. Studies from large custodians like Fidelity, routinely show that there is a propensity on the part of many investors to buy high and sell low. As an example, selling investments in March or April of 2020 at near market bottoms is already proving to be a regrettable move and could spell trouble for retirement readiness. Bear market losses, as a result of erratic trading without a plan, can take years to recover from.

Emotions-based trading aside, how one is invested has come under the spotlight as a result of the pandemic. The market performance delta between the information tech economic sector and the energy economic sector stands at greater than 60 percent so far into 2020. Investment portfolios, not taking growth versus value-oriented asset classes into consideration, may be doing so at the risk of multi-year underperformance.

A comprehensive financial plan during these years can mitigate market volatility jitters and pave the way for a disciplined path towards retirement goals.


Preparing for the Next Phase in the 60s and Beyond

Those in their 60s are faced with the prospect of another zero interest rate regime commenced by the Federal Reserve in response to Covid-19. Not only are government securities yielding negative rates after adjusting for inflation (as of this writing), a $10,000 emergency savings account is likely generating a whopping $1 in interest per month, exclusive to highly valued customers, of course!

Further exacerbating income generating potential for folks facing imminent retirement, are shocks in the energy sector and commercial real estate, areas traditionally relied upon for retirement income.

Special consideration should be given this year to Roth conversions on investments held in IRAs that have suffered steep declines as a result of the dislocation seen in some segments of the US economy. If these investments are expected to rebound and thrive in a post pandemic world, what better way to position those assets than in a Roth account where future recovery of prices will be tax free. For investments that have seen better days, tax loss harvesting can be a great tool this year. Always consult with a tax advisor before taking any steps with large tax implications.

In the months ahead, the US economy is positioned to enjoy a resurgence of consumer and business activity as confidence rebounds to early 2020 levels. The optimism is showing up in discretionary spend data tracked by sites like, new home sales and other service sector metrics. 

Millennials, who have been long behind the curve with regard to homeownership, are finally getting in on the action, driving new home sales to 2007 levels. While bankruptcies in retail have captured headlines, the economy has been innovating for a post pandemic world. Let's remind ourselves that companies like Airbnb, CarGurus, Wix, Dropbox and more came into existence as the housing bubble was coming to an end and new solutions were warranted during the last economic crisis.

2020 is one for the history books. It will be remembered for many things including large scale societal, corporate and individual changes. It is highly likely that the investments landscape will emerge altered from the pandemic as well. Diligence and prudence are needed more than ever to ensure harmony with a changed world.


Looking for a Financial Advisor for You?

If you are currently looking for help with financial planning, contact us. We are happy to schedule an introductory meeting at your convenience.

Book an Appointment



The opinions and recommendations expressed herein are those of Carnegie Investment Counsel. The material was prepared by or obtained from sources which we believe to be reliable, but accuracy is not guaranteed. Any opinions expressed herein are subject to change without notice and are not intended as a recommendation to purchase or sell a security.   Past performance is no guarantee of future results.  Investment advisory services are offered by Carnegie Investment Counsel, an SEC registered investment adviser.  Registration as an investment adviser does not imply a certain level of skill or training. Carnegie does not provide legal, insurance, or tax services. For a detailed discussion of Carnegie Investment Counsel and its investment advisory services and fees, see the firm’s Form ADV on file with the SEC at



Topics: Investment Management

Shams Afzal, AIF®

Written by Shams Afzal, AIF®

Shams Afzal is Managing Director and Portfolio Manager at Carnegie Investment Counsel’s Toledo office. A passionate and solutions-focused professional, Shams is dedicated to the total well-being and success of his clients. Shams also brings to Carnegie a unique perspective on risk management and material deficiencies sometimes obscured in public financial statements.

  • There are no suggestions because the search field is empty.

carnegie top 4 things 2021 version-1

Looking to hire a Financial Advisor?

Enclosed in our eBook are four questions we recommend you ask any prospective group you review. Plus, you'll learn: 

  • The difference between fiduciary and suitability standards
  • Learn how some advisors may not be required to work in your best interest
  • Be aware of various types of hidden costs
  • The importance of third party custodians
  • The difference between fee-based and fee-only

Download Now, It's Free

Recent Posts

Subscribe here for monthly blog updates!