are some essential steps that will make you a better investor.
a foundation of financial planning principles
To have a successful investment plan you will need to have a
foundation of investing principles. Reading a book or two or
enrolling in a continuation education course is an excellent start.
To build upon that and to keep up-to-date, there is a variety of
other sources of information whether from radio, newspaper, classes,
With the foundation of investment knowledge that you've built, the
next step is to develop a written strategy with goals. A written
plan does not have to be long to be effective, and even three or
four sentences is a fantastic start; the topics could be investment,
budgetary, but preferably both. If you’re not sure where to
begin you may want to describe what investments you own and why. Then expand by
expressing any current short-term and/or long-term financial goals,
as well as other thoughts you have.
having your investment plan in writing you'll decrease the odds that
you'll react on emotions and market volatility. Instead, you'll make
changes when pre-defined conditions are met, things you wrote
up to date
After you build a foundation of
investment principles you'll want to supplement it with current
information. Certainly a newspaper such as Barron's,
Wall Street Journal(WSJ), Investor's
Business Daily (IBD), or New
York Times (NYT) are good options.
Barron's is weekly so it takes less time and is our favorite. If you
plan to select individual stocks rather than funds or indexing do
or in addition, sources such as newsletters, radio, on-line
sources, and magazines are valuable. Many brokerage accounts provide
research reports for individual companies, have opinions on the
economy and financial markets, and other topics. Our investor
links page offer numerous quality references in each of these
so many viewpoints you'll need to filter out the noise. It is
important to find regular sources that you can trust and are
comfortable with (don't worry about every opinion or headline). How
do you tell when you have those trusted sources? By the confidence
and conviction you have taking action upon their recommendations as
well as measuring the results.
Make an appointment with yourself to
review your financial picture. You may want to do this monthly,
quarterly, or annually. You’ll want to list your assets and
liabilities on a spreadsheet or legal pad to give yourself a current
snapshot of your financial status. Now that you have a list of your
assets go back to your written plan, and make any revisions.
The above steps may seem overwhelming, especially if you are new to
investing. Everybody has to start somewhere and in time the above
steps will not take that much time. The hardest part is getting
started. If you need help in devising a system of organizing your
investments and planning, Charles
R. Schwab has a few great books that are easy to follow.
future value Excel file we created.