How To Invest Wisely

Knowing how to invest wisely will help usher you into an enjoyable retirement. Investing should not be based on emotions, but that does not mean it can’t be fun. It is a beautiful feeling when the stocks you are holding are doing well. It is likewise fun to see tendencies over time and make decisions and form strategies based on them. Nurturing your portfolio from birth and seeing it mature over time can be fun. Like gardening, if done with the proper mindset, tending your stocks will provide you with a meditative, Zen-like state of acceptance. You rejoice in bounty, accept down-markets, and overall gain a connection—as the gardener has to his or her garden—to our nation’s system of production.

To those who have been skeptical of putting their money into stocks—there has been a lot of negativity in recent years about investors and Wall Street. The person who does not invest could easily assume that putting money in the stock market is something greedy people do, something that should be reserved only for the reckless and ambitious, or otherwise privileged—the 1%. But if we all enforce this paradigm, if fewer and fewer people from the middle class and lower are investing, that’s going to spell disaster. This has implications far outside the sphere of retirement.

When you’re ready to start delving into the stock options available to you, it can be hard to know where to begin. How do we tell the difference between a good investment and a bad investment?

How To Invest Wisely: How Big is the Company?

If you want to determine how much up and down is likely for a stock, look at the size of the company. The common way to distinguish this is market capitalization, most typically referred to as “small-cap,” “mid-cap,” and “large-cap” companies. Compare a multi-billion dollar company (large-cap) to a company that has just begun to be publicly traded (small-cap). The larger, more established companies (large-cap) generally come with less risk. On the other hand, small-cap stocks draw in investors who are seeking an investment with higher growth potential.

If you have just retired, which investment will make more sense for your portfolio? Security-minded retirees, especially those who are depending on their retirement accounts for income, are going to gravitate toward the security offered by large- and mid-cap stocks. This is because large-cap companies are more established and thus have less risk. Dividends provide another incentive that pushes retirees toward established companies. These payouts are not paid out by every company. The more established a company is, the more likely it is to pay out dividends to its shareholders. These dividends are yours to do with what you will—even reinvest them in the company, which many investors do. These payouts (which are often paid out quarterly) can also fit nicely into a retiree’s income plan.

Growth or Value?

When learning how to invest wisely before retirement, it’s important to research the two main categories of stocks: growth or value. Companies that are on the rise, and who are expanding in their particular market at an above-average rate, are growth stocks. Tech stocks are a good example of this category, and they generally have a greater chance for gain. Examples of these include industry-redefining companies with new products, such as solar power companies, Internet start-ups, or biopharmaceutical research companies. This potential growth, of course, comes with a higher level of risk.

Value stocks are defined as a stock with a lower price when compared to other investments in its sector. An investor would choose this stock because he or she thinks that the stock is being undervalued, or has more to offer than its price suggests. The details of this type of investment may show it to be solid (i.e. it has a relatively consistent earnings history). Value stocks may also boast a high dividend yield, which can again make them of interest for retirees.

Having an abundance of any one of these in a retiree’s portfolio can open them up to undue risk. From comparing growth and value stocks, we see that risk level is a necessary factor in evaluating what is right for our portfolio. It is important to understand your own risk tolerance before investing in growth or value stocks due to their daily fluctuations in the market.


Investment decisions can often be influenced not by educated decisions, but by emotion. Relying solely on an emotional or “gut” feeling when learning how to invest wisely will not point you in the right direction financially. The average retiree depends on sound financial advice to protect his or her livelihood. In the sensitive financial time of retirement, having a financial planner whom you trust, who educates and empowers you, and importantly, one with whom you are able to talk regularly, will make the difference in your investments.

Stocks & Their Market

No matter how accustomed you are to investing in the stock market, it can be a challenge to make it fit into your portfolio in the right way. This is why the Miramontes Capital team has spent so much time perfecting our service model to deliver with the support and advice you will need. If you feel that you are ready to move to the next stage of investment planning and want to know more about how to invest wisely, do not hesitate to give Miramontes Capital a call.

Sid Miramontes and Miramontes Capital have helped more than 1,000 people achieve their retirement goals—and Sid’s new book catalogs that dedication to every single client in the retirement planning process. You can request your copy of the book “Retirement: Your New Beginning” by clicking here.


Schedule an in-office or over the phone consultation to discuss how Miramontes Capital can help you with your new beginning through retirement planning.

Miramontes Capital is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Miramontes Capital and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Miramontes Capital unless a client service agreement is in place.