1. Think portfolio, not funds
Your portfolio should reflect closely to your risk personalities. If you are prone to heart-attacks even with the slightest glitch in the stock market, then you should be having more bonds in relative to equities. However, there must be a balance amongst the elements (money market, bonds, equities) in your portfolio to ensure that you will survive throughout the bull and the bear markets.
Think of the forest, not the trees.
2. Rebalance your portfolio
The market is an agent of change. Hanging on with the same portfolio might not be a good idea since certain industries might not be doing as well as it did 2 years ago. So, no matter how “smart” the current decision is, without constant monitoring and rebalancing, your “smart” decision might not look that smart a few years down the road.
Change is the only constant.
3. Keep shoveling in new cash
Even with all the best investment tools and tips, and probably even cheat codes, you might still not make much out of it if you just don’t have enough or constant cash to be pumped into it.
Self-discipline will be a valuable trait here to see the full blown effect of your wise decisions.
Remember the 10% rule?
3 Strategies for Higher Returns by Walter Updegrave…
To get an idea of just how much boosting the amount you invest can increase your wealth, I suggest you take a look at a recent column I did for MONEY Magazine that looked at how much money “Average Joe,” a hypothetical 401(k) investor, would have in his account after 15 years by contributing more to his plan vs. picking top funds. As you’ll see, adding more money has a much bigger impact than superior investing.
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