Making the Most of What"s Left of Your Money
Scared to look at your brokerage statement? You can accept the losses that you have (though you don't have to like it) and make the best of what's left.
Here's 7 tips on how: 1.
Your strategy is important.
You can invest the slow and steady method of building financial wealth or take high short term risk and lose everything fast.
Emphasize long term investing and savings, and stick with it.
2.
Re-work your financial plan to adjust your spending patterns in a downturn.
Tightening the belt does work.
3.
Look for steady income in retirement such as a pension or annuity to offset the risk of equities.
You will always need some equities for inflation protection but a steady income stream will help you feel better about your spending.
4.
Make sure that all the professionals that you deal with are watching out for your interests and not their own.
It's not what you make but what you keep and expenses can eat into what you keep.
Make sure all those brokerage and advisor fees are kept to a bare minimum.
5.
A diversified portfolio won't necessarily avoid a downturn but it will keep losses at a minimum.
Diversify over different asset classes (large cap, small cap, international, etc.
) and styles (growth, income, balanced, etc.
) People see that bonds have outperformed stocks over the last ten years but you shouldn't lose faith in equities.
Equities have outpaced inflation over the long term.
6.
Dollar cost averaging and reinvesting dividends are great strategies to use in a downturn.
Those investing strategies were successful in the flat market of 1966-1983.
7.
Use annuities only when they are suitable for your situation.
For example, if you already own stocks and bonds, then a fixed annuity could be an appropriate addition to your portfolio.
You can't predict the markets or the economy, but you can control your portfolio.
Sophisticated investments that you don't understand or are not suitable are not worthy of your review.
Stick to the tried and true.
A long term plan with a portfolio strategy for diversification is the backbone of a good solid investment program that will build wealth and reward you with the returns that you need to fulfill your financial goals.
Take action now to make the most of what's left of your money.
Here's 7 tips on how: 1.
Your strategy is important.
You can invest the slow and steady method of building financial wealth or take high short term risk and lose everything fast.
Emphasize long term investing and savings, and stick with it.
2.
Re-work your financial plan to adjust your spending patterns in a downturn.
Tightening the belt does work.
3.
Look for steady income in retirement such as a pension or annuity to offset the risk of equities.
You will always need some equities for inflation protection but a steady income stream will help you feel better about your spending.
4.
Make sure that all the professionals that you deal with are watching out for your interests and not their own.
It's not what you make but what you keep and expenses can eat into what you keep.
Make sure all those brokerage and advisor fees are kept to a bare minimum.
5.
A diversified portfolio won't necessarily avoid a downturn but it will keep losses at a minimum.
Diversify over different asset classes (large cap, small cap, international, etc.
) and styles (growth, income, balanced, etc.
) People see that bonds have outperformed stocks over the last ten years but you shouldn't lose faith in equities.
Equities have outpaced inflation over the long term.
6.
Dollar cost averaging and reinvesting dividends are great strategies to use in a downturn.
Those investing strategies were successful in the flat market of 1966-1983.
7.
Use annuities only when they are suitable for your situation.
For example, if you already own stocks and bonds, then a fixed annuity could be an appropriate addition to your portfolio.
You can't predict the markets or the economy, but you can control your portfolio.
Sophisticated investments that you don't understand or are not suitable are not worthy of your review.
Stick to the tried and true.
A long term plan with a portfolio strategy for diversification is the backbone of a good solid investment program that will build wealth and reward you with the returns that you need to fulfill your financial goals.
Take action now to make the most of what's left of your money.