How To Invest Better And Why The Best Investments Are Boring
- by Forbes
- Jan 04, 2024
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4. Avoid Continuously Messing With Your Portfolio
Even if you were able to pick the perfect investment portfolio, guaranteed to get amazing returns, there still would be a way to screw it up.
Historically, the S&P 500 has earned around 11% annually over the long run. The average investor doing it alone typically ends up getting something like one-third of that total return over time, according to the DALBAR studies. The study is released every year, but the results seem to be similar year in and year out.
Whether the market is going up or down, some people make poor financial moves. Those kinds of decisions would kill their financial returns even if they were lucky enough to pick the best investment options at that time.
The bottom line is set up the investment success pillars one through four. Have them work automatically and let them do their thing. You will be on track for financial freedom before you know it.
Investing success is often much more about avoiding big investing mistakes than being able to perfect the time to buy and sell a specific investment. These boring pillars of success can help you avoid some of the most common investing mistakes.
For extra credit, talk with a fee-only fiduciary financial planner to determine how much and where you should invest each month in order to reach your personal financial goals. Hopefully, they will also throw in some valuable tax planning to help you reach financial freedom faster and easier.
Forbes
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