I'd asked him about a "no-load" mutual fund recommended on Wall $treet Week with Louis Rukeyser. My broker's response? He picked up a book from the corner of his desk and threw it in my direction. "Here" he said. "Figure it out for yourself."
My first reaction was to say that I needed his help. But after the meeting, I went to our local library and checked out a book on no-load mutual funds. As I read, the veil began to lift. Perhaps I could, and should take control of my own financial future.
I have distilled more than 30 years of financial research and professional experience into a simple, practical, robust and cost-efficient investment approach that I'd like to share with you. This is no "get quick rich" scheme. Instead, wealth creation takes time, regular investment contributions and smart decision-making.
Now, you too can create a personally tailored, world-class investment portfolio in three simple steps.
How you divide your money between the major asset classes of stocks, bonds and cash will, in large part, determine the risk and reward of your investment portfolio. The more you invest in stocks, the greater the likelihood your portfolio will, at some point, suffer dramatic losses of 50% or more. The trade-off for this risk? Stocks offer potentially much higher long-term returns than either bonds or cash-like investments such as money market mutual funds.
Now, let's determine an investment mix of stocks, bonds and cash that's right for you. Imagine you're in control of the three levers behind the make-up of your portfolio, because you are. Use the three suitability slider bars to show how strongly you disagree or agree with each statement on a scale of 0 to 100. The result? A personally tailored and recommended mix of stocks, bonds and cash.
While you could invest in individual securities, professionally managed baskets of securities such as mutual funds and Exchange Traded Funds (ETFs) are far better suited to meet the needs of most investors. In particular, we like index funds for their broad diversification, low cost (saving you money) and low turnover (saving you commissions and likely, reducing taxable events).
There is no need for complexity. A simple, yet effective portfolio can consist of three broadly diversified funds, one for each of the three asset classes. Simpler yet, your portfolio could be represented by a single fund such as a target date fund, provided its overall asset mix closely matches your desired mix.
Your local library and Morningstar are great places to begin your search for candidates. Soon, we'll offer a link here to our Select Funds Newsletter with our best fund recommendations for each asset class.
Invest in your company 401(k) plan or open a taxable individual or joint account or tax advantaged retirement account with a mutual fund family or brokerage that offers the mutual funds or Exchange Traded Funds you've selected to represent your recommended mix of stocks, bonds and cash and invest proportionally to achieve your asset mix.
Below is an interactive tool that makes it easier to determine the amount you'll invest into each of your selected mutual funds or EFTs and reach your desired mix of stocks, bonds and cash.
Type in your Total Investment Amount in dollars, desired stock and bond allocation percentages, name your investments and the percentage to be invested in each.
There's little need for ongoing management. Stick with your investments, unless your needs or circumstances change. Use the opportunity to maintain or re-establish your investment allocation to stocks, bonds and cash whenever you add or withdraw money.
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Financial plans allow you to prepare for things like your child's education, your retirement, or big/unexpected life changes.
It should start with your goals and objectives, and from there we will build an investment portfolio, retirement and tax planning, as well as insurance needs.
You should meet with us to review your plans every five years, or before any major life transition.
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