fbpx
U

Portfolio Perseverance

December 2, 2011

With market fluctuations and continuous financial volatility, many are tempted to give up on investing altogether.  The anxiety and fear that come along with an uncertain economy may seem overwhelming, but today’s show gives you the tips you need to persevere with your long-term investing plan.

The November 2011 Consumer Reports Money Adviser has laid out six guidelines for keeping your head in a volatile market:

  1.  Stick with a long-term plan:  Develop a diversified investing plan and continue to follow it, even if market conditions become temporarily scary.  Adjustments for big changes in the market may be necessary over time, but it is important to act based on a consistent plan, rather than each move of the market.  You can design your own plan or locate a fee-only financial planner at www.napfa.org to assist you with reaching your goals.
  2. Maintain your balance:  It is important to rebalance your account as needed to ensure that you stay on track with your allocation objectives.  A good rule of thumb is to review your portfolio construction annually or if your allocation shifts by 3 to 5 percent.
  3. Fight the impulse to flee:  Some of the best opportunities for an investor are presented when others panic and run from the market.  If you are a long way from retirement, stick it out and take advantage of the chance to buy low and sell high later.
  4. Keep the right amount of cash:  Consumer Reports recommends stashing enough cash to cover at least six months of expenses, with retirees holding one to two years of expenses in cash.  Holding appropriate cash reserves is vital to your financial plan because having that stability will ultimately help you sleep better at night.
  5. Get defensive:  It may be wise to hold stocks in industries that hold up even during a recession.  Some examples of products that people always need are pharmaceuticals, consumer staples, and utilities.  Christine Benz, director of personal finance at Morningstar investment research company recommends Vanguard Dividend Growth (VDIGX), Yacktman (YACKX), and Dreyfus Appreciation (DGAGX).
  6. Don’t invest impulsively:  Be alert for advisers looking to exploit the fear in the economic environment.  Many will recommend unsuitable or fraudulent investments, knowing that investors are especially vulnerable in uncertain times.  Do your due diligence to make sure you are always comfortable with your investment selections.

While financial instability can leave you feeling uneasy, it is not necessary to quit the game altogether.  If you keep yourself informed and follow your long-term plan, it is still very possible to meet your financial goals.

Be sure to check us out on Facebook and YouTube and please leave us any feedback you may have!

 

Link to Balsam Hill Christmas Trees:  www.balsamhill.com

 

 

 

Most Recent Episodes

How to Be Wealthy By Age! (Can You Catch Up?)

How much does it take for you to meet your retirement goals by age, and what are some common traps your peers fall into? Learn more about how to be wealthy, mistakes to avoid, and exactly what a little extra saving can do for your retirement income. In this episode,...

Can Money Buy Happiness? (Here’s the Truth)

Money and happiness aren’t directly correlated, but they are intertwined. Some believe that once they have a large, pie-in-the-sky amount of money, they will finally be happy. Others are working towards a more specific retirement number they hope will bring happiness....

Passive Income EXPOSED: 3 Ways to Actually Make Money (2022 Edition)

Passive income is a dream for many looking to get out of their 9-5 or just create extra income on the side. In this episode, we’ll break down different ways to actually earn passive income in 2022. In this episode, you'll learn: The easiest and hardest side hustles...

Millionaires Share Their Secrets to Financial Success! (2022 Edition)

It’s that time of year again: our annual Money Guy Wealth Survey episode. We’re back with all-new data for 2022, including new questions. You’ll learn who millionaires are, what they did to get there, and how they built their wealth. In this episode, you'll learn: The...

Dumb Financial Decisions That Americans Make! (Do You?)

Throughout our years of doing the show, we’ve seen more than our share of financial mistakes. Some are more common than others - in this episode, we’ll discuss some of the dumb financial decisions Americans make - and what you can do differently. In this episode,...

3 Things You SHOULD Spend Money On (Even During a Recession)

When is it okay to start spending money on things you want, but may not need? In this episode, we'll discuss when you can start spending money on "unnecessary" purchases, and what goods, services, and experiences are worth spending money on. In this episode, you'll...

3 WORST Types of Financial Crooks (Don’t Get Scammed!)

In the financial world, there are a lot of crooks that try to get into your pockets. From metaphorical crooks selling a bad product to literal crooks stealing your money, we'll cover the different types of financial crooks to watch out for and how you can protect...

Financial Advisors React to NFL Players Spending Their First Million!

Not many Americans will ever make over one million dollars in a year, but professional athletes regularly make that and more. In this react video, we'll see how NFL players spent their first million dollars after making it into the league. As we review their mistakes...

Everything You Need to Know About Real Estate Investing!

Over the years, we have had some great conversations about real estate investing. In this episode, we put together the ultimate guide to show you everything you need to know about real estate investing! In this episode, you'll learn: How to get started in real estate...