13 Investments Retirees Probably Want To Avoid

Many of the best retirement-savings strategies focus on wealth preservation rather than aggressive growth. Even if you're doing better financially, promises of significant and quick profit may be tempting, but they're typically risky during a time when recovery options are limited.

Your asset allocation should reflect your age, which often shifts as you transition from your 60s into your 70s. At this stage, stable investments are key, even if they don't deliver rapid returns.

Avoiding the following investments can help you protect what you've worked for your whole life. '

High-value collectibles and memorabilia sales have increased in recent years and are expected to continue doing so, primarily driven by global online marketplaces. Unfortunately, investments such as art, coins, toys, and sports memorabilia can be challenging to accurately value.

One need only consider the Beanie Baby crash. In the 1990s, people thought these small stuffed animals were great investments. Now, they're in every thrift store bin.

Options and derivatives probably sound like a great strategy for quick growth. However, they require precise timing and expertise. A single wrong move can result in significant losses.

This is especially true for those with minimal time to recover. Balanced portfolios with diversified stocks and bonds might be a better alternative.

Crypto markets are extremely volatile and largely unregulated. Prices can crash without warning. In fact, we've seen individual tweets sent out by billionaires have tremendous effects on value. Bitcoin lost over 3% in value from a single "breakup" tweet from Elon Musk.

These issues make crypto too risky for those on fixed incomes. Consider inflation-protected securities as an alternative.

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Structured notes are a type of hybrid investment that has derivative and bond components. Their returns are linked to an underlying asset, which often makes them appear to be a safe investment.

Unfortunately, their terms are often complex and challenging to evaluate. Accompanying their "guarantees" are a lack of transparency, no real liquidity, and no actual guarantee of principal return unless the investment is held until maturity.

The high yields promised by emerging market bonds from foreign countries may seem very enticing. However, these higher yields come with currency risk, political instability, and potential default.

Retirees could face significant losses on what they thought was a safe investment. U.S. Treasury or investment-grade municipal bonds have historically been more stable.

Current and pre-retirees have to be especially vigilant when it comes to investing in annuities. The terms of these investments are often confusing. Even worse, they can come with high fees and surrender charges that eat into your fixed income.

Seek out low-cost annuities or income-focused mutual funds that offer clear terms.

Borrowing money to invest can magnify potential losses. You're not just risking your money. You're risking someone else's. A downturn could wipe out your investment and retirement security.

It's typically a better idea to stick to unleveraged, low-volatility investments.

Foreign laws, currency shifts, and local instability can turn what seems like a foolproof investment into a financial nightmare. Typically, you want investments that allow for minimal control and are not affected by foreign issues.

Domestic investments allow you to monitor better and manage your money.

Also known as microcap stocks, these investments typically trade at a price below $5. However, they carry a heightened risk of fraud, volatility, and complete loss. The federal government even warns against such investments.

Diversification via mutual funds or exchange-traded funds (ETFs) with consistent long-term performance could be a better alternative.

Diversification is an ideal retirement investment strategy. However, adding private equity or hedge funds to the mix can be dangerous. They're expensive and illiquid.

Returns are not guaranteed, and your money could be inaccessible for years. Balanced index funds overcome many of these issues.

Buying, renovating, and reselling properties can tie up tremendous amounts of capital. It also carries major risks if markets falter or repair costs balloon. Those who want to invest in real estate could consider real estate investment trusts (REITs).

These offer real estate exposure without additional work on your part or extreme upfront investment.

If you truly believe in a company, you may be tempted to place a significant amount of money into its stock. However, this can be unsafe even with blue-chip brands. For instance, Nokia was once considered a safe, blue-chip stock. Now, it is one-tenth of its value at the turn of the century.

Too much money in one stock exposes you to severe loss with no cushion for recovery. Instead, many retirees diversify with index funds or broad-sector ETFs.

Investing in commodities may seem like a great idea, but unfortunately, many are speculative in nature. This includes raw materials (such as crude oil or natural gas) and agricultural products (such as wheat, soy, and others). Their prices can fluctuate significantly due to factors such as politics, global markets, and even weather conditions.

Commodity investment is often too erratic for a stable retirement income. Gaining exposure to commodities through diversified, professionally managed funds could offer more stability and safeguard your income.

While promises of quick returns are no doubt tempting, the truth is typically bleaker. Any investment that offers fast and significant returns usually carries a high level of risk. When these investments go sideways, they can be financially devastating.

The good news? There are still plenty of smart ways to start investing in retirement. Remember, you're looking for a comfortable living, not risky get-rich-quick schemes. By focusing on secure income rather than aggressive growth, it's possible to build a comfortable retirement egg.