Over 20 years of working with clients, some clients find that investing for the long term may be scary. Below are five strategies we use to help reduce the emotional fear.
- Don't time the market.
- Money you need tomorrow or soon, should be in a savings account, money market account or something similar that provides less risk to principal than the stock market.
- Asset allocation.
- Asset allocation is a fancy way of saying don't have all your eggs in one basket. While not a guarantee against loss, the appropriate asset allocation should smooth out the highs and lows.
- Investment selection.
- In other words, the investments used need to match your goals and the timeframe of those goals. Different investments have different time frames. We work to help match your individual goals and timeframes with those of the investments used within your plan.
- Dollar-cost averaging.
- What if you put $200 per month into a Roth IRA and as the stock market goes up, that $200 per month buys fewer expensive shares. The opposite is when the stock market goes down, that $200 per month buys more shares that are "on sale" at relatively lower prices. That's the backbone of having a higher likelihood of long-term success.
- Rebalance your portfolio
- Just as one rotates the cars on their vehicle every 10,000 miles as tires wear differently, your investments needs to be rebalances as they grow or wear differently as well.
For a more detailed dive into the above click here: https://www.rummelwealth.com/resource-center/investment/5-smart-investing-strategies