continued Here are the four primary factors you should consider:
- Your investment objective. What are your goals?
- Your timeframe. Are your needs short or long term?
- Your risk tolerance. Are you conservative or aggressive?
- Your current financial situation. Are you earning and saving enough to meet your objective?
For most people, it’s an inevitability that our life situation changes from time to time. Your plan should reflect your current standing. There are also times when our portfolio might not align with your preferred asset allocation model, or your attitude toward investing changes. In either case, routinely reviewing how your assets are allocated will keep you on track.
Control your emotions . . . and spending
Get a grip on your emotions. Few things get the emotional roller coaster in motion quite like overspending and stretching yourself financially thin, which can become commonplace during the holiday season. So be smart with your spending and keep in mind that for your investment strategy to succeed you need to be responsible and committed to the plan you and your team create. Also, don’t overreact to market movements. Just because a stock dives in a short period of time doesn’t mean it can’t rebound just as quickly. Keep a mature and positive outlook and always seek professional advice if you’re concerned about an investment.
Keep it personal
Don’t think of investing as having to beat the market or creating a portfolio better than your neighbors. Think of it as a way to achieve your own set of personal goals. Believe it or not, taking big risks and buying into “foolproof” gimmicks leaves less opportunity for success in the future.
Investment goals will allow you to measure the performance of your investments in stocks, real estate, bonds and other ventures. To set some investment goals, make a list of all the different things you’d like to achieve from your investments. For example, you could say if I invest X amount of dollars in this portfolio monthly, I expect to reach X dollar goal when my oldest starts college, when I retire, or when I want to take that trip of a lifetime. These goals should reflect the things you’re looking forward to seeing in return after all of the hard work that went into investing.