Ignore the Markets; Stay Invested

One of the worst things you can do when the market takes a dip (or a dive) is to immediately pull your money out. While it may seem logical–why lose any more money–it’s almost always the wrong move. Taking money out during a downturn makes it incredibly difficult to take advantage of the eventual upturn. If you understand the tax implications of losses, you further take advantage through smart tax harvesting (I’m not going to get into that here). Now, I’m not talking about divesting your money in one stock and investing it in another that you think is poised Continue reading Ignore the Markets; Stay Invested

Investing is Based on Luck; Diversification Helps

I’ve touted the importance of diversification here in many posts over the past few years. While it may seem like diversification is the cure-all for any portfolio, I should remind you that regardless of whether you diversify or not, investing is still a risky endeavor that way more often than not involves a lot of luck. That’s not to say you still can research a stock or company you invest in and do your homework–that helps immensely to determine strong performing stocks and to avoid ones that tend to be more volatile. However, no matter how the stock has performed Continue reading Investing is Based on Luck; Diversification Helps

Giving Your Portfolio International Flair

Diversification is important to your portfolio. It spreads your risk around and prevents a market downturn from completely decimating your portfolio by ensuring that all your money isn’t tied up in one sector or one type of stock. Remember, some areas of the markets will get hit harder than others. I’ve mentioned various ways to diversify–such as investing in unrelated market sectors, investing in companies of various sizes, having different investment vehicles. What I haven’t really talked about is going international as part of your diversification. Having some investments in international companies–or companies based outside the U.S. and Canada–can be Continue reading Giving Your Portfolio International Flair

Diversification For the New Year!

It’s been a while since I last harped on the importance of diversification and making sure that you are spreading the risk around in your investment portfolio. Now that we are into the new year–and a new decade–now might be a good time to talk about it again. Diversification means investing in various stocks and market sectors so that you are not just putting all your risk on one place. By spreading the risk around, your portfolio won’t be as hard hit by market swings. For example, if you have some of your portfolio invested in the tech sector, for Continue reading Diversification For the New Year!

Thinking of Retirement as Unemployment

In a stereotypical retirement scenario, the retiree will stop working in their early to mid-60s and spend the next decade or two of their life enjoying the non-working world. While this may vary slightly from person to person, it’s usually how retirement goes for most Americans. Since you most likely won’t be working once you stop working, you will need to make sure you have enough saved to get through the final decade or two (or three) of your life. Unfortunately, more than half of American adults do not have enough saved up to meet their retirement needs. It’s easy Continue reading Thinking of Retirement as Unemployment

The “I” in Investing When It Comes to Risk

Investing is more than just a numbers game. By that, I mean that you can have all the valuations, trends, and numerical data and still make bad investment choices or create a losing strategy. Most likely it’s because you don’t understand the risk in connection with where you are at in life. For example, a young investor (i.e. someone in their 30s) is in a much different place than an older investor (i.e. someone in their 50s). That younger investor can absorb a lot more risk than an someone older. Why is that? Because that younger investor has more time Continue reading The “I” in Investing When It Comes to Risk

Want Peace In Retirement? Ignore the Markets!

I’ve said it here before and you’ve probably heard it thousands of times from other sources, the stock market is unpredictable. No, you can’t beat it or think you can outsmart it. So, what’s the best way to deal with it if you are using it to help build up your nest egg or fund your retirement? Ignore it! I know that might be hard to do, but it’s the only way you’ll stay sane. That’s especially true during economic periods like what we are going through right now. At the moment, it’s hard to tell what exactly the markets Continue reading Want Peace In Retirement? Ignore the Markets!

Knowing Your Assets

Do you know what your assets are? Seriously, when was the last time you sat down and put together a list of the accounts, properties, investments, and consumer goods of value (i.e. a car, boat, etc.) that you have under your name? This can be important as it’s good to not only know what you have, but possibly formulate a plan as to what assets you are comfortable with parting with should you need money in an emergency or assets that could bring in retirement income. Unless you are incredibly wealthy and know that money will never be an issue, Continue reading Knowing Your Assets

Outsmart the Markets? You’ll Just Look Dumb

Many Americans use the stock market–and other investment markets–as a way to build up their nest eggs over the long-term. After all, well thought-out investments in steady, low-risk annuities or mutual funds can produce quite a return over a long period of time, such as multiple decades. However, not all Americans have the discipline and patience to make such long-term investments. It’s not uncommon for some to attempt to outsmart the markets by either trying to predict what an investment will do next or by making risky investments that they hope will payoff in the short-term. This rarely, if ever, Continue reading Outsmart the Markets? You’ll Just Look Dumb