It's summer again – time for many of us to take a break and possibly hit the open road. But even if you go on vacation, you won't want your investments to do the same – in summertime or any other season. How can you help make sure your portfolio continues to work hard for you all year long?
Here are a few suggestions:
Avoid owning too many "low growth" investments. As you know, different investments have different characteristics and can help you in different ways. For example, you typically own stocks because you want them to grow in value so that you can eventually sell them for a profit. Other investments, such as certificates of deposit (CDs), provide you with a regular source of income and stability of principal – two valuable contributions to your portfolio. However, investments like CDs don't offer much in the way of growth. So if you own too many of them, you might be slowing your progress toward your important financial goals, such as a comfortable retirement.
You can maximize the productivity of your portfolio by owning a variety of investments – domestic stocks, international stocks, corporate bonds, U.S. Treasury securities, CDs and more. How much of each investment should you own? The answer depends on a variety of factors, including your age, income, risk tolerance, family situation and specific objectives. Over time, your ideal investment mix may change, but you'll likely need at least some growth potential at every stage of your life.
Don't let your portfolio go "unsupervised." Your investment portfolio can be subject to "drift" if left alone for extended time periods. In fact, without your making any moves at all, your portfolio can move in directions that may not be favorable to you. Suppose you think your holdings should be made up of 70% stocks, but due to strong gains, your stocks now make up 80% of your portfolio. This development could lead to a risk level that feels uncomfortably high to you. That's why you should review your portfolio at least once a year, possibly with the help of a financial professional, to check your progress and make adjustments as needed.
Don't stop at the nearest "resting place." Some people hope that if they can get that one "winner," they will triumph in the investment arena. But the ability to "get rich quick" is much more of a myth than a reality. True investment success typically requires patience, persistence and the resilience to continue investing even during market downturns.
In other words, investing is a long-term endeavor, and you need a portfolio that reflects this reality. The investment moves you make today may pay off for you decades from now. You need to establish your goals and keep them constantly in mind as you invest. And you will never really reach the end of your investment journey, because you'll need to make choices and manage your portfolio throughout your retirement years.
Hopefully, you will enjoy a pleasant vacation sometime this summer. But your investment portfolio shouldn't take time off.
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By Pamela Crawford, author, Easy Patio Veggies & Herbs
Photographs by Pamela Crawford
Pamela has written a great article about mixing herbs in containers. Herbs are natural companions with different textures for interest. The herb mix of parsley, sage, rosemary and thyme offers lots of flavor from a small combination loaded with textural interest.
To learn more, click here .
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