By Brent Matthew
The investment landscape never stays still. As retirement draws near, adapting to market shifts becomes less of an option and more of a necessity. That’s why many experienced financial professionals emphasize the value of diversification in a retirement portfolio.
Rather than relying on a single asset class or sector, diversification enables your retirement strategy to adapt to market fluctuations. While much of the conversation traditionally focused on mixing stock sectors, today’s approach looks beyond that. The makeup of your investments themselves—what you hold, how they behave, and when they produce income—matters just as much.
What does a properly diversified retirement portfolio look like, and how can you build one?
What a Diversified Retirement Portfolio Really Means
The modern investment market offers more financial instruments than in the past. Prior to retirement, growth and saving are the primary objectives. After retirement, though, the mindset changes. Many of the assets you hold can then become sources of actual income.
A sufficiently diverse portfolio has more than common stocks and bonds; it can include mutual funds, exchange-traded funds (ETFs), real estate, cash reserves, dividend-issuing stocks, and, for many, annuities.
Each instrument (and sometimes even the individual items within the instrument) behaves a little differently when it comes to value. Some investments provide sustained, predictable growth. Others are used as baselines for preserving wealth. Still others pay income.
A Balanced Approach to Risk Management
Risk management is the foundation of a diversified retirement portfolio. Diversification spreads different levels of risk across a variety of assets. Instead of betting the farm on a single asset (or category of assets), you broaden your holdings across many.
A balanced retirement approach calls for two priorities: limiting losses and creating opportunity. If all your assets are tied up in the stock market and a drastic downturn begins just as you start taking withdrawals, your nest egg can shrink in short order.
Conversely, if your entire portfolio is too cautious, it can become stagnant and won’t be able to keep up with inflation. This outlook limits your mindset to preserving worth and passing on potential opportunities, and it might not even accomplish the first goal.
By allocating assets to multiple vehicles, you can mitigate risk to a greater extent. When one asset or vehicle in your portfolio takes a hit, other parts can keep your risk at steady levels or even experience growth.
How Diversification Supports Income Flexibility in Retirement
Since you’ll be relying on it for at least a portion of your post-retirement income, a balanced portfolio should also support income planning. If you’re drawing from a diverse array of investment income sources, you can structure them to react appropriately in different market conditions.
For example, you may rely on dividend-paying stocks for income. If the market enters a prolonged downturn, you may consider reducing or pausing withdrawals from those positions. In the meantime, you could draw more from other sources—such as annuities, bonds, real estate income, or cash reserves—to help maintain consistent income without selling assets at a loss.
This kind of flexibility is vital. It can help steer you away from the common yet very risky pitfall of having to sell investments at a loss just to cover your expenses.
Your Partners in Building a Strong Retirement Plan
The benefits of having a diversified retirement portfolio are compelling. But making the right choices can be complicated, especially as you approach retirement.
Scottsdale Wealth Advisory can make things simpler. With years of experience guiding clients on both growth and preservation strategies, our team is ready to help you start building a plan tailored to your needs and goals from the minute you contact us.
To schedule your complimentary financial coaching session, call (480) 247-9090, email info@SWAFirm.com, or book directly at calendly.com/BrentMatthew.
About Brent
Brent Matthew is the founder and CEO of Scottsdale Wealth Advisory, a full-service fiduciary retirement planning firm serving pre-retirees and retirees across Arizona and multiple states. With a strong commitment to always putting clients first, Brent leads the firm in developing comprehensive, tax-efficient financial plans tailored to each family’s unique goals. He is responsible for researching investment, annuity, and life insurance strategies and building smart asset allocations that reflect both long-term growth and risk management.
Brent is driven by a core belief: “The success of this firm will be measured by the success of the families it represents.” That client-first approach has guided his work since the beginning. He is currently enrolled at the College for Financial Planning and is on track to earn his CERTIFIED FINANCIAL PLANNER® designation. He also holds his Series 65 license and Arizona Life and Health Insurance Producers License.
Outside the office, Brent embraces the Arizona outdoors with “lil B” and their two pomskies, Heimo and Kota. Whether he’s hiking, fishing, dirt biking, skiing, golfing, kayaking, or skeet shooting, Brent finds balance and joy in staying active. He’s also a fan of CrossFit, brunching, and cruising the Phoenix canal system on his beach cruiser—usually with classic tunes from the Marshall Tucker Band, Gordon Lightfoot, or Crosby, Stills & Nash playing in the background. To learn more about Brent, connect with him on LinkedIn.
