Five Investing Truths

Another year is in the books and it is a time again to reflect on the past year, to think about the lessons we've learned along the way and  to contemplate how to make our tomorrows better. 

This past year taught me that the topic of investing carries with it a great deal of angst and complexity for many.  I decided I needed to bridge this information gap in some non-threatening manner by reducing the topic of investing to its most essential truths.

Five Investing Truths That SERVE You Well

Save Regularly

• Rule of thumb – Maximize tax advantaged savings first through 401(k) and similar accounts

Ensure Liquidity

• Rule of thumb – Maintain at least six months of living expenses in cash or cash equivalent savings

Review Asset Allocation; Rebalance

• Rule of thumb – Starting point for equity allocation is 100% less your age with remainder generally in income producing securities; Adjust percentages based on tolerance for risk

Value Indexing over Active Management

• Rule of thumb – Indexing provides greater performance reliability; Most actively managed mutual funds underperform their benchmarks

Efficiently Invest Thru ETFs

• Rule of thumb – Exchange Traded Funds (ETFs) provide a great combination of diversification, lower costs and performance reliability