Basic Long-Term Investing Strategy
So, now that I have determined my long-term goal, how exactly should I invest my money?
Studies have shown that about 90% of the portfolio's return on investment is determined by asset allocation (as opposed to security selection). So, it is more important to determine whether to buy stocks or bonds rather than to buy Coke or Pepsi. And, within each major asset classes (stocks and bonds), one needs to invest across different industries and around the world.
Interestingly enough, if you ask five different portfolio managers, you would get five different responses to the best asset allocation. Having said that, here is the asset allocation that I currently have for my retirement account. I have about 30 years left before I retire.
40% Domestic Equities
20% Large-Cap Domestic
12% Small-Cap Domestic
8% Energy Sector
30% Foreign Equities
12.5% Large-Cap Foreign
12.5% Small-Cap Foreign
5% Emerging Market
20% Fixed-Income Bonds
10% REITs
Well, if you have any children, this may be a great savings vehicle for them. Affinity Bank is offering a 10% APY savings account for children up to 16 years of age. FINE DETAILS. The 10% APY rate is good on the first $500. Anything ... Read
This is the one that started it all. In 1903 a man by the name of Charles Ponzi discovered a way to make great fortunes. It worked by using the investments of subsequent investors, (as opposed to the profits of the company), to pay the ... Read
So, now that I have determined my short-term goal, how exactly should I invest my money? For those who want to "set it and forget it", invest in a CD that matures at exactly the same time that you will need the money. For others ... Read
