There’s one basic strategy that all investors should consider to simplify their portfolios and financial affairs.
Make an investment plan, stick to that plan, and check in frequently to rebalance your investment allocations to the plan.
Just think what these three steps (really one) could eliminate:
- ...worry about where the market is or where it’s going (a good plan will build in market risk);
- ...indecision about where to invest extra cash or savings, or where to find funds for life events (the plan’s asset allocation will have the answer); and
- ...impulsive and usually costly behavior such as buying hot and selling cold (your plan will have parameters for when to buy or sell).
In other words, a properly prepared investment plan can save you time, money and ulcers.