Best Investment Strategy For the Future

The best investment strategy focuses onwhat percent do you want safer vs. how much
strategy and asset allocation, not on picking thedo you want really safe? Let's say you're willing to
best investment year after year. Few peopleput half at risk, but want the other half as safe
really have any investment strategy at all, andas possible. Your asset allocation: 50% to stocks
they lose money in years like 2008 and 2009. Iffunds and 50% to a money market fund or
you want to make money in your investmentstable account if you have one available. That's
portfolio in the future, and sleep at night, read this.how you allocate the money you already have
I'll keep it simple.invested, and that's the way you allocate any
The best investment strategy is not about pullingnew money you invest periodically.
your hair out to find the best investment or evenOnce you have repositioned your money to 50%
the proper asset allocation or investment mixstocks and 50% safe, the really important part of
each year. That's a formula for frustration.your ongoing investment strategy comes into
Instead, the MOST IMPORTANT thing you can doplay; and here is where investors drop the ball. At
in the future, your best investment strategy, isleast once a year, or when the stock market
much easier and requires no crystal ball. It startsaction is extreme, check your asset allocation
with simple asset allocation; and then comes thepercentages. REBALANCE if you are not still close
important part. First I'll tell you why most peopleto 50-50. If you had done this in the recent past,
have lost money in recent times, and then I'll tellyou would have made money in your investment
you what you can do to make money in theportfolio. You would have made money in the
investment game without sweating the details.past decade as well. Here's how the rebalance
Most people invest much like they play any otherpart of our best investment strategy would have
game they don't really feel up to speed on. Ifworked with the 50-50 example in 2008-2009.
they go into the game with a plan of action, theyIf you went into 2008 at 50% stocks and 50%
fall apart as soon as the unexpected happens.safe, by early 2009 your safe investment would
Then, they REACT as their emotions take over.have been worth more than 50% of the total vs.
That's what investors as a group have done inyour stock funds since stocks took big losses in
recent times. They've sold stocks and stockthat time period. To rebalance you would have
funds out of fear because the stock marketmoved money from the safe side to your stock
went south; and put this money into bond fundsfunds to make both sides equal again. In other
for greater safety. The end result was predictablewords, you would have bought stocks cheap.
using hindsight, because this has happened before.Then a year later in early 2010 your stock funds
Once again the average investor sold stockswould have accounted for well over 50% of your
when they got cheap, and will likely start buyingtotal, since stocks soared the last 9 months of
them again when they feel that they are missing2009.
the boat. At that point in time stock prices willSo, with things again out of balance you rebalance
likely be high and ready for another tumble, ifagain in early 2010, which means you move
history again repeats itself. Now, let's focus on themoney from stock funds to the safe side and
best investment strategy for getting and stayinglock in some profits. As a long term plan this is
on track in the future. Asset allocation refers toyour best investment strategy because it has
how you invest your money across the assetyou buying stocks or stock funds when prices are
classes... stocks vs. bonds vs. truly safe and liquidlower, and taking profits when stock prices have
investments. Even if you just invest in a 401krisen. Emotion and guess work are taken out of
plan or in other mutual funds, the followingthe picture. Focus on balance and rebalance. Some
investment strategy is available to you. To keep401k plans and other retirement programs offer
things real simple, assume you're looking at yourthis service and will automatically do it for you per
investment options in your 401k or fund companyyour instructions at no cost.
you invest with. The options will be similar.To keep things real simple, just rebalance once a
What percent of your total investment portfolioyear, like in January. This way you won't forget
are you willing to put at risk to earn more vs.and let things get off track.