Permanent Value

Week in Review 5/28/13

Bruce Doole
May 28th, 2013

FIVE RULES OF SUCCESSFUL INVESTING

1. Diversify

Spreading the risk around in a portfolio over multiple asset classes can make it less vulnerable to the market’s unpredictability. This can be done by diversifying investments within asset classes. This keeps a portfolio balanced and less vulnerable to fluctuations in the market.

2. Keep Costs Down

Working with a financial advisor helps avoid investments with high costs that reduce returns. Also, setting aside money for investments before planning personal budgets is an essential part of being a successful investor.

3. Pay Attention to Taxes

In addition to investment costs and inflation, taxes frequently reduce returns. Know what types of accounts are right for different types of portfolios.

4. Buy & Hold for the Long Run

Using market timing as an investment strategy is not reliable as a consistently winning strategy. Frequently buying and selling investments increases taxes as gains are taken. Investing for the long term can help increase overall returns by reducing the number of transactions.

5. Know Yourself

Everyone has different investment temperaments. Some people are not as affected by market swings as others. Take a look at your portfolio and see if it fits you and your investment temperament.

Source: Vanguard Marketing Corporation