Chris Gardner, FMF&E Wealth Management, LLC, East Syracuse, NY
Start the year with promises worth keeping
When the new year rolls in, many of us take a long hard look in the mirror and resolve to improve our health. We all know that more exercise, more sleep and a better diet will enhance our energy level and reduce our risk of serious disease. But why stop there?
Financial health is a very important aspect of well-being too. Making a few fundamental investment resolutions can instill good financial habits that protect the comfort, security and happiness of our families.
Yes, keeping resolutions can be a real challenge. Permanently changing behavior — at the gym or in the markets — demands self-awareness, discipline and patience. Still, it’s worth the effort. As the new year unfolds, consider making these commitments to your financial future:
1. I will embrace the basic math of savings and investing — spend less than I earn, put money away in good markets and bad, let compounding do its magic and avoid credit card debt.
2. I will ensure my portfolio matches my long-term goals and objectives. I will adjust my portfolio when my goals change, not when the Dow has a bad day, a new IPO is announced or recession rumors start to swirl.
3. I will not invest based on forecasts, opinions or hunches — no matter how foolproof they seem. I accept that the future cannot be foretold and know that putting money on future events is gambling, not investing.
4. I will stop searching for tomorrow’s hot money manager or breakthrough stock. I will put my trust in capitalism and its positive long-term expected return. I will not try to outsmart the market, but accept the return it provides.
5. I will not concentrate my portfolio in a few stocks or industries, as diversification reduces my risk in any economic or political environment. It is a friend I want on my side.
6. I will keep my cost of investing low, understand the expenses I pay and recognize the impact of taxes.
7. I will take emotion out of the equation. I will create and stick to a plan that demands few decisions that can be derailed by fad, fear, haste or greed. I will enlist the help of a wealth advisor to help keep me on track.
8. I will turn off the TV. I recognize that CNBC and other financial media offer entertainment, not practical advice. I will not let so-called pundits and the urgency of the 24/7 news cycle steer me into the weeds.
9. Finally, if I feel an irresistible urge to break these resolutions to chase a “sure thing” stock tip — after all, I’m only human — I will do so with a small play money account, not the core savings of my family.
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