Retirement is not necessarily the time to turn completely conservative on investments and think only of disbursements, according to Ron Weiner, president of RDM Financial Group in Westport, Conn., and Boca Raton, Fla.
"People think that retirement is the time to circle the wagons and go to all bonds," says Weiner, who considers himself a conservative investment advisor. "And people think emerging markets are risky investments."
Neither of those assumptions is true, he adds.
Weiner is a strong believer in investing in emerging markets, even for retirement portfolios, although the asset class usually represents only about 6% of the equity part of the portfolio. But it is needed for growth.
A person can often expect to have nearly 30 years in retirement, "so you have to be a great steward of your money," he says.
Weiner founded RDM Financial Group in 1990 and it now consists of RDM Financial Group, the parent company; Retirement Design & Management Inc., a registered investment advisory; RDM Investment Services Inc., a broker-dealer; and RDM Insurance Service Inc., a risk management company. Previously he served as senior vice president of the retirement group at Cowan and Company and director of the financial planning department at Oppenheimer & Company.
RDM has $600 million in AUM, up from $200 million in 2003. About half of Weiner's clients are retired.
"Emerging markets are our long-term play. For our emerging market strategy, we focus on large multinationals that service the emerging markets," he says. "These are big, strong companies that are stable and, thus, a hedge against inflation and offer a healthy dividend.
"These aspects are especially important for our retiree clients who are looking for cash flow from their portfolios," explains Weiner. "Another strategy to gain emerging market exposure and further minimize risk is through emerging market debt."
The reason emerging markets make sense as a long-term investment, Weiner says, is because these countries are at the same stage the United States was in at the turn of the 20th Century. They are creating a strong middle class that is going to need and want new products.