earmarked for growth among specific investments like stocks and real estate.
Part of how you decide to allocate your investments depends on the types of
investments that you want to focus on. As I discuss, diversifying
in stocks worldwide can be prudent as well as profitable.
Here are some general guidelines to keep in mind:
✓ Take advantage of your retirement accounts. Unless you need accessible money for shorter-term non-retirement goals, why pass up the free
extra returns from the tax benefits of retirement accounts?
✓ Don’t pile your money into investments that gain lots of attention.
Many investors make this mistake, especially those who lack a thoughtout plan to buy stocks. I provide numerous illustrations of
the perils of buying attention-grabbing stocks.
✓ Have the courage to be a contrarian. No one likes to feel that he is
jumping on board a sinking ship or supporting a losing cause. However,
just like shopping for something at retail stores, the best time to buy
something of quality is when its price is reduced.
✓ Diversify.the values of different investments
don’t move in tandem. So when you invest in growth investments, such
as stocks or real estate, your portfolio’s value will have a smoother ride
if you diversify properly.
✓ Invest more in what you know. Over the years, I’ve met successful
investors who have built substantial wealth without spending gobs of
their free time researching, selecting, and monitoring investments. Some
investors, for example, concentrate more on real estate because that’s
what they best understand and feel comfortable with. Others put more
money in stocks for the same reason. No one-size-fits-all code exists for
successful investors. Just be careful that you don’t put all your investing eggs in the same basket (for example, don’t load up on stocks in the
same industry that you believe you know a lot about).
No comments:
Post a Comment