In a recent post for US News Smarter Investor I said the following: “Sorry to disappoint, but investing is not sexy or trendy. It takes persistence, monitoring, and commitment.” I want to elaborate on this a bit here.
Persistence in the context of investing means that this 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. I’m not an advocate of frequent trading, but adjustments in one’s overall portfolio and in individual holdings are warranted from time to time.
Monitoring is vital. Ideally you started the investment process as an outgrowth of a financial plan. As part of the planning process hopefully you developed a formal investment policy. The investment policy should be the basis of your review process for your individual holdings and your overall allocation. Ideally the policy includes monitoring criteria for mutual funds, stocks, ETFs, etc. You should also monitor your portfolio balance against the accumulation goals in your financial plan. If retirement is the main goal, how are you progressing? If you are well ahead of schedule, perhaps it is time to reduce the risk in your portfolio. If you are already retired are you on track with your nest egg balance vs. the amount you are withdrawing? Again the answer might lead to a need to adjust your investment allocation (or perhaps your spending).
Commitment is vital in terms of making investing a priority. Sometimes it’s difficult to fit monitoring investments into our busy lifestyles. Like anything else, if your financial success is important to you, it is vital to commit the time required.
If you don’t have the time, the interest or the expertise to devote to your investments and your financial plan, consider hiring a professional financial advisor. Here are a few tips that might assist you in the process of selecting the right advisor.
Like anything else, if your financial success is important to you, it is vital to commit the time required.
ReplyDeleteIf you are planning to put up a business, it is an essential thing to have a financial advisor besides you. At least you do have someone who you could seek for advices about your finances. It is to avoid any over spending on this matter.
ReplyDeleteAll great points. Good to have expert financial planners who do find it sexy!
ReplyDeleteThnaks for the comments.
ReplyDeleteRoger, Excellent tips and right to the point. In investing, as in anything important, there is a requisite time required to do it right! Congrats on the posts across the web!
ReplyDeleteThanks for the comment and the compliment. I hope that you are getting settled in after the move.
ReplyDeleteI completely agree with you when choosing a financial planner. I chose the Financial Planner Scottsdale because it worked for me and was close by as well.
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