In investing, it’s as important to practice good habits as it is to avoid bad ones, and the stakes have rarely been higher. The longest bull market on record is in its 11th year, volatility is sky-high, the economy is uncertain and market sentiment is skittish. But long-term investors should rise above the fray and focus on the fundamentals. You already know you shouldn’t buy stock on a tip from your Uncle Fred. But it’s even more important to set appropriate goals, save regularly and monitor your progress. Don’t beat yourself up for the occasional mistake. But if you follow the seven steps below, you’re likely to feel good about your portfolio over the course of a long investing career.
HAVE A PLAN
“I want to make money” isn’t a plan. No one invests to lose money. Serious investors set goals and create an investment plan to meet them. Goals can be short-term or long-term. A short-term goal might be a new car. Long-term goals could be sending kids to college, retiring comfortably or leaving a legacy to your heirs.
It helps if you write down your goals. “If you don’t write them down, they disappear into thin air,” said Ray Ferrara, a certified financial planner in Clearwater, Fla. And review your goals regularly (preferably annually) to see how you’re doing and whether your goals, or your plans for meeting them, need to be revised. A vacation home in the Rockies might seem a little less important when you start learning about grizzly bears. And a consistently poor-performing mutual fund might need to get the boot.
This story is from the November 2019 edition of Kiplinger's Personal Finance.
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This story is from the November 2019 edition of Kiplinger's Personal Finance.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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