Unlike the accumulation phase – where emphasis is placed on growing wealth – the consolidation phase is a balance between growing and protecting one's investments. The consolidation phase usually begins during the middle of an investor's life, when children are nearing college age and the distance between the beginning of one's career and retirement are roughly equal (although the consolidation phase will last until retirement).

During the consolidation phase, significant home equity should exist, as should sufficient education funding, so that retirement planning can take center stage. The consolidation phase is so-named because it is usually when investors begin to organize the hodge-podge of investment and savings accounts that have grown up over the years: an old 401k here, IRAs there and checking and savings accounts scattered over various banks become a single retirement account and a single bank – sometimes all under one roof – handling the investors financial affairs.

Finally, during the consolidation phase, investments may be balanced between growth and income, although price appreciation should take precedence – albeit less so than during the accumulation phase – over current income. (For more on this read, The Season's Of An Investor's Life and Bonds for Every Stage of Life.)

This question was answered by Justin Bynum




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