Five Strategies for Investment Success

 As the summer gets going, you should be able to enjoy barbecues with family and friends rather than worry about the ups and downs of stocks and bonds. Ultimately, you are investing so that you can achieve your financial goals. Here are five tips to tackle the challenges of investing in a volatile world:

  1. Work with a professional who is looking forward with today’s situation in mind. The challenges of Euro Crisis, slowing growth, and low bond yields have been on our minds and on the minds of other portfolio managers regardless of market returns. Financial planners discuss these issues on a daily and weekly basis within their firms as well as with money managers and peers. Plug in for professional advice related to your personal investing situation.
  2. Talk to someone when you have concerns. Once you’re working with a CERTIFIED FINANCIAL PLANNER™ you have a partnership. A financial planner can help uncover your concerns and find answers for your fears! Most importantly, when your financial situation is changing, make sure to update your overall financial plan and analyze your investment mix based upon the new information.
  3. Review your risk orientation. In 2011, we considered significant changes to positions for our clients in anticipation of sustained volatility (which we saw last summer and seems to be popping up again). From our point of view we may continue to see more uncertainty this summer and through the presidential election cycle in November. This is not a blanket prescription but our point of view. You should know your own posture in terms of investment mix based upon careful consideration of your personal views on risk.
  4. Stick with your plan. If you have started an investment plan, give the process time to work out. Investment results are not measured by days or months but by years. Doubt and frequent switching may result in a drag on your portfolio’s returns.
  5. Rebalance when appropriate. If markets continue to decline, rebalancing into the assets that have come down helps to maintain discipline and proper diversification. This is by design and meant to position your money through a forward-looking lens rather than the natural human tendency of focusing on the rear-view mirror.

This five-pronged approach to investing in a volatile world is an excerpt from our June Investment Update. If you ever have questions about investing or comprehensive financial planning, don’t hesitate to contact me.