I should really be charging a small fortune for this advice,
but what I’m going to share isn't actually a secret. I'm continually
bombarded with pitches from folks who want me to subscribe to their
newsletter that is guaranteed to deliver big investing profits. My
question is always, “If this is so good why are you sharing it with me
for this absurdly low price?” Note I’m not knocking all investment
newsletters or services, just those that make clearly outlandish claims
of success.
Take at look at hedge fund performance. A piece on CNBC the
other day that said that the average hedge fund was underperforming the
S&P 500 index by a wide margin in 2012. While some of these funds do
have solid long-term track records, others do not and they aren't shy
about charging hefty fees.
In my opinion there are few, if any, investing secrets.
Here are a few keys to being a successful investor based upon my experience as a
financial adviser:
Persistence. Successful investing is a
continual, lifelong process.
Many of the “Nifty Fifty” stocks of the late 1960s did not turn out to
be the “one-decision” stocks they were touted to be. Investors need to
stay on top of their holdings, the world around them, and their own
unique situation. A
djustments in one’s overall portfolio and in individual holdings are warranted from time to time.
Understand your risk tolerance. It sounds great to
say I don’t care what happens to the markets in the short-term as long
as you can ultimately practice this. Case in point were the many
investors who tragically sold out of their equity holdings near the
bottom of the last market downturn only to see the market head into a
tremendous rally since March of 2009. These folks booked significant
losses and in many cases never got back into the market to recover them.
Invest in line with your goals. Your investment
portfolio should be driven by your financial goals and your timeframe to
achieve those goals which should come together in the form of a
financial plan.
Monitoring your individual holdings and your overall portfolio is vital. Even
index funds change, just witness Vanguard’s recent change of index providers. Certainly actively managed mutual funds
need to be monitored
as do investments in individual stocks and bonds. I don’t encourage
market timing or even frequent trading, but there are no “set it and
forget” investments. On top of that, it is critical to make sure that
your overall portfolio is in line with your investing and asset
allocation plan.
Commitment is vital in terms of making investing a
priority. Sometimes it’s difficult to fit monitoring investments into
busy lifestyles. Like anything else, if your financial success is
important to you, it is vital to commit the time required.
Createwealth8888
All the above Not-So-Secret Rules of Investing Success is applied by Uncle8888 and shared here too.
Simply focusing on 3M's
Method,
Mind and Money Management
Are you sharp enough to tell the difference?
26.15
Posts
