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The Do’s and Don’ts of Investing

October 13, 2023 | Posted in: Insights, Investing, Wealth Strategies

Thousands of investment books purport to lead you through the intricacies of the markets to financial success. It doesn’t have to be that complicated. In fact, I believe that achieving reasonable investment goals is a function of a couple of “Dos” and a large number of “Don’ts.”

The “Dos” are basically motherhood and apple pie:
• Start saving early, save an appropriate amount, and save regularly
• Invest in a well-structured, diversified portfolio
• Rebalance your portfolio every so often
• Base your planning on a long-life expectancy

Happily, there are excellent financial advisors as well as financial tools and products to assist in this process.
Once the framework is in place, the real key to success is avoiding the “Don’ts.”

• Invest in things that you do not understand
• Invest in complex or esoteric strategies
• Base your financial plan on stretch return assumptions
• Assume you know something that other investors do not
• Increase your risk as the market rises or reduce it after a decline
• Pay attention to commentators, pundits, and economists
• Change your portfolio based on headlines
• Change funds or managers very often
• Chase track records
• Trade very much if you select your own securities
• Pay high fees without clear demonstration of significant value-added
• Withdraw money from a retirement plan except in the case of a dire emergency

Yes, it is just that simple!