5 Smart Investing Strategies
There are some smart strategies that may help you pursue your investment objectives
While there are many sound investment approaches, we’re going to review only five that have the potential to benefit the greatest majority of investors. Understanding these strategies could help improve your portfolio’s long-term results.
First, don't time the market. For most, it doesn’t make sense to try to time the market. Missing a few of the stock market’s best performing days can reduce your portfolio’s overall return.
Second, review your asset allocation. Asset allocation is the process of dividing your investment dollars among various asset classes. While that may sound simple, it’s a bit more sophisticated than you may think. Asset allocation is an approach to help manage investment risk. Asset allocation is not a guarantee against investment loss.
Third, choose appropriate investments based on your individual situation. There is a wide variety of investment options available in the marketplace; selecting the appropriate tools for your portfolio can be a challenging proposition.
Fourth, remember dollar-cost averaging. In short, dollar-cost averaging is the process of investing a fixed amount of money in an investment vehicle at regular intervals—typically monthly—for an extended period of time, regardless of price. Keep in mind that dollar-cost averaging does not protect against a loss in a declining market or guarantee a profit in a rising market. Investors should evaluate their financial ability to continue making purchases through periods of declining and rising prices. The return and principal value of stock prices will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.
Fifth, consider re-balancing your portfolio. Over time, a portfolio’s risk profile may adjust due to the performance of certain investments. Re-balancing may help a portfolio better reflect an investor’s goals, risk tolerance, and time horizon. Of course, past performance does not guarantee future results and actual results will vary.
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