donttouch9906

Last April I wrote an article on whether to invest in stocks or mutual funds. My inbox was flooded with email concerning the matter.
It seems that most of my readers like funds because they do not have to constantly read the financial papers or
watch CNBC.

I can not argue that funds are very popular with the majority of investors, but are they giving
their money’s worth? Only if you pick the best of the best (Look at my article on mutual funds that are the best of the best). And also if the investor keeps
the funds for the long term and doesn’t touch them unless something happens to the fund that gives out a danger
signal.

Most professional money managers claim that an investor should review their portfolio once a
year, if that, just to be on the safe side. The average investor tends to buy and sell at the wrong times. The
solution would be to hold on for the long haul which has always been my philosophy.

You need a long term investment plan for retirement because social security will not be enough,
neither will pension plans. Choose investments with a level of risk that makes you feel comfortable and that are
appropriate for your long term goals.

I believe in the wealth generating power of stocks. It has been proven over time that stocks
have been the winner over anything else. Bonds and cash are used as a safe guard for most people, but they do not
grow and only pay interest.

You need patience and discipline to hold onto or add investments through down markets as well
as up markets.

Remember to create a broadly diverse portfolio spreading risk over a variety of investments with
asset allocation and mutual funds.

Do not stop investing when you retire. You do not have to shift all your stock or stock funds
into fixed-income investments or even money market funds. A balanced portfolio is still the better way. If you
are over 65 years old, you should have at least 60% in stocks and or stock mutual funds. Remember, you still have
a good 20 more years to enjoy life.

 

George