How to invest in your 70s

By the time you reach your 70s, you may well already be retired, or at least thinking about it carefully. But does hitting your 70s mean you need to change your investing strategy or stop investing altogether?

While it is never too late, there are some important considerations to take into account when managing your investments in your 70s.

“While your working life may be coming to an end, your investing runway still has decades left to run, so don’t ever feel like you’ve been aged out of investing,” said Darius McDermott, managing director at broker Chelsea Financial Services. “When you’re relying on your portfolio for income, capital preservation and diversification have never mattered more.”

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Adjusting your investment strategy to potentially reduce the risk can be a good idea.

Investing in your 70s: equities or bonds?

A key decision for any investor to make, regardless of age, is how much should they allocate to equities (stocks and shares) or fixed income (bonds).

Because bonds are often considered safer than equities, older investors tend to hold a larger proportion of their portfolio in the asset class. Some people subtract their age from 100 and allocate the resulting percentage of their portfolio to risk assets, such as equities, and the rest to safer assets like bonds.

So, for example, if you are 75, you might put 75% of your assets into bonds.

This still means that a quarter of your portfolio is exposed to the potential rewards of stock market gains, but the majority of it is reasonably protected in the event of a stock market crash.

This strategy isn’t foolproof though as bonds are not entirely risk-free. Bond markets and equity markets have also been relatively closely-correlated in recent years, meaning that both could crash at once.

So rather than allocating that 75% exclusively to bonds, it might make sense to consider it as a bucket to allocate to less risky assets in a broad sense. This could include commodities, certain defensive stocks, wealth preservation funds or even cash. Some top saving accounts pay as much as 5%. Alternatively, money market funds are a popular way to invest as they offer a low risk option – similar to cash, but the return can potentially be higher.

However, the impact of inflation means that playing it too safe can be a bad idea. “As inflation stays elevated, the cost of keeping your hard-earned savings in cash only grows, and while interest rates look attractive today, it would be unwise to bet your entire retirement income on them staying that way,” said Chelsea Financial Services’s McDermott.

Should you invest in defensive stocks in your 70s?

You don’t necessarily need to abandon stocks entirely in your 70s, but it pays to consider exactly what kinds of stocks and shares you’re buying.

For the most part, you’ll likely want to concentrate either on defensive sectors, value stocks, or income stocks (there is some overlap between all three of these).

Defensive sectors

Defensive sectors are those which tend to perform about as well during an economic downturn as during growth periods. Consumer staples, healthcare and utilities are three good examples: people don’t spend significantly less on shampoo, medicine or their water bill when the economy is doing badly, compared to when it is doing well, so stocks in these sectors tend to hold up well during a downturn.

Infrastructure stocks can also play a defensive role in portfolios as infrastructure companies tend to have fairly predictable income streams which can rise in line with inflation.

“A good satellite option is an infrastructure fund,” said McDermott. “First Sentier Global Listed Infrastructure rounds things out with inflation-linked income from real assets like toll roads and utilities, diversifying away from traditional bonds and dividends.”

Income stocks

If you’re approaching or are already in retirement, the income you generate from your investments is key, as this could well form the bulk of your spending money.

Income isn’t just about funding your retirement; it can form an integral part of growing your portfolio’s value.

James Lowen, co-portfolio manager of J O Hambro UK Equity Income, makes the case that income stocks could be preferable to bonds, because of the potential for dividend growth.

“In fixed income coupons [the amount that a bond pays its holder in interest] are flat; they don’t grow,” he said. In the equity market, on the other hand, dividends do tend to grow – and this counteracts the impact of inflation eroding returns from fixed income investments.

“When choosing between equities and fixed income, [it’s important] to understand one grows, one is flat in nominal terms,” said Lowen.

Value stocks

Whatever kind of stocks you’re buying, it’s important to pay attention to the price if you’re investing in your 70s (and, arguably, at any age).

“When you buy a stock… your starting valuation has a big determinant of what you ultimately make,” said Lowen.

Buying stocks that are trading at high multiples compared to their fundamentals can leave you exposed to higher losses if market confidence turns.

On the other hand, buying stocks at lower valuations can offer some protection against downside losses, and also potentially offers greater room for gains.

“If you pay a full price, where’s your upside?” says Lowen. Buying value stocks “protects your downside and creates your upside optionality”.

Can commodities protect your wealth in your 70s?

Commodities can offer some diversification from equities, which can protect your investments in your 70s. While bonds can become correlated with equities, this is less true of certain commodities; the climate is often a bigger driver of agricultural commodity prices than the business cycle, for example.

On the whole, though, “commodities are cyclical and volatile, tracking economic growth closely”, said McDermott.

Gold, for example, has become more correlated with equities this year, since gold prices and the stock market have both become especially sensitive to interest rate expectations.

“Higher real yields also make gold less attractive, especially for anyone relying on portfolio income, since gold pays none,” said McDermott.

Meanwhile, industrial metals like silver and copper are closely linked to the business cycle as both metals have substantial industrial applications, so demand tends to rise when economic activity is higher.

Which funds could make good investments in your 70s?

“When you’re choosing funds, you’ve got to understand what their track record is on income growth,” said J O Hambro’s Lowen. His fund invests in UK equities with the potential to grow income over the long term; the fund is forecast to yield 4.15% in 2026. It has achieved a 9% compound annual dividend growth rate over the 21 years since its inception, meaning it would have yielded 29% in 2025 based on the initial unit price.

You could also select City of London Investment Trust (LON:CTY) which has raised its dividend every year for 59 consecutive years – the longest record of annual dividend increases for any investment trust.

McDermott highlighted Capital Gearing Trust (LON:CGT) as an investment trust heavily focused on capital preservation, which has delivered a positive return in 42 of the past 44 years while aiming never to lose money.

“Absolute return funds are another option worth considering, using both long and short positions across companies to smooth returns and cushion against market falls,” said McDermott. “Here we like Janus Henderson Absolute Return and SVS RM Defensive Capital.”

Multi-asset funds can also offer exposure across several asset classes in a single holding: McDermott singles out Orbis Global Cautious and Jupiter Merlin Income Portfolio as lower-volatility options.

And to add bonds – which McDermott calls “the traditional ballast of any portfolio” – McDermott recommends TwentyFour Dynamic Bond, or Artemis Global High Yield Bond as a higher-yielding option.