The Road To Good Investing Is Never Always Smooth

Making an investment in the market is a lot like driving on a long trip.

At some time, you are going to run into pot holes and coarse patches. When that occurs, you must definitely drive with added caution, but you need to keep on going if you need to reach your destination. Whilst you could be almost convinced to pull over and wait out the coarse times, it’ll delay or may even stop you from reaching your goals.

So what should you do when the way to investing gets bumpy?

Buy Low, Sell High : the premise behind investing is to buy low and sell high. you cannot do that if you pull out of the market or stop investing when the market goes down. If you are investing for the long-term, you should be satisfied when the market is down, because then stocks are “on sale” and you can pick up more shares at a lower cost. Therefore, by having a mixture of asset sectors, based primarily on your hazard toleration, your goals and your timeframe, you are much more likely to meet your goals. In addition, having a mixture of asset sectors decreases your risk of loss, since you will not have all your eggs in one basket. Rebalance annually : Just like keeping your auto maintained, you must review and rebalance your portfolio every year.

You need to have an asset grant that is right for your risk toleration, goals and time frame. Annually, you want to review your portfolio to make sure that your assets are still allotted correctly to meet your goals.

Stay the Course : When the market gets volatile, your best shot is to remain the course. If you pull out of the market when it’s down, you might do more harm than good.

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Kristine A. McKinley, CFP, CPA, and founder of The Money Wise Coach, teaches individuals and families how to get out of debt, invest for retirement, college, and other financial goals.