Over the last 12 months, we have talked about getting finances organized so that you have a little left over to invest. Well we are better than half way through the year, and have passed tax-free day. You have had a couple of weeks to spend those few extra pennies so now it is time to get serious about getting your finances organized. The fluctuations in the markets also have many people wondering what is the best plan for their investments. Many of the Financial Planners we meet have great advice and so I asked one that I know to simplify the investing process. The 10 step program he sent back to me is just what all of us need to be reminded of now and then! Enjoy!

10 Steps to get your investments back on track!

Some of the problems that people face when it comes to investing are where to turn for good investment advice and what types of investments they should own. The sheer number of choices available can cause frustration and anxiety and usually results in the investor doing nothing. Here are 10 “rules of the road” that should be considered when making investment related decisions.

1. Have a Plan
Experienced travelers will tell you that getting there is half the fun, but unless you know where you’re headed, you’ll waste a lot of time and money along the way. The same can be said for investing.

2. Don’t be blinded by taxes
It is often said that there are two things we can count on in life: Death and taxes. No one wants to pay more than his or her fair share at tax time, but investment decisions based solely on tax considerations are all too often not good decisions. Quality should come first.

3. Stick to Quality
As investment strategies go, Rule #3 offers pretty simple advice. Unfortunately, it’s also among those most easily overlooked. A fine home can’t be built from inferior materials, regardless of the talents of the builder. Similarly, the soundness of your overall investment strategy is only as good as the quality of individual investments you own.

4. It is time in the market, not timing the market that counts.
Some investors believe that successful investing depends on predicting the stock market’s ups and downs. They buy and sell frequently, trying to time the highs and lows of the market. Predicting the short-term movement of the market is like trying to predict the weather and how many times has the weatherman been wrong. To reach long-term objectives like a financially secure retirement, you need long-term, high-quality investments.

5. Diversify
Unless you own a pretty reliable crystal ball, you owe it to yourself to protect your financial security by diversifying your investments. Diversification spreads your assets among a variety of high-quality securities, so your success is not tied to one company or one type of investment. Although you can’t control the factors that cause investment prices to fluctuate, you can diversify your portfolio to smooth out the ups and downs.

6. Buy to Keep
Despite legends of vast fortunes made on one or two trades, most successful investors make their money over time, not overnight. The most consistently successful strategy for building long-term financial security is to buy and hold high-quality investments.

7. Your first loss is your best one.
Cut bait. When a fisherman thinks he’s in the right spot, it’s tough to get him to move on, even when there’s nothing biting. Some investors are the same way. As a long term investor, the most consistent success formula for building financial security is to buy and hold quality investments. However, it’s not foolproof. You can’t always keep from making mistakes, but you can keep from making them worse.

8. Make your decisions carefully
It’s a funny thing about investment decisions. Even people who have trouble with their own are more than happy to help with yours. The next time you get some free advice, before you rush to act on it, remember that in most cases, you get what you pay for. Investment decisions are some of the most important that you’ll ever make. Be willing to invest a little time in them.

9. Once you decide act
With or without a crystal ball, chances are slim that you will make your investments on the either the best or worst day of the year. The time to invest in the market is when you need long-term growth and inflation protection. Time is an investor’s greatest ally.

10. Review your plan
How do you know if your plan is the right one? If it considers your personal financial objectives and meets your needs for safety and return, that’s a good start. Over the course of your lifetime, your economic situation will change and so will your goals. When they do, your investment plan should change too. Regular reviews can make sure that it does.

For complete details and further information on the “rules of the road”, call or stop by the Edward Jones office located at 1048 King St. West, in the Westdale Village. Article forwarded by Chris Burgess, Investment Advisor.
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