Five Questions Every Investor Needs to Ask

As each New Year rings in we seem to think about new goals or reevaluate current ones. When it comes to investing, reevaluating current goals and objectives as well as making new ones are essential to a successful investment experience. This all starts with having an investment plan crafted or reviewing the one you have in place.

2015 is starting out with a lot of noise in the market place. As the noise of the stock market continues, which by the way will never stop, don’t let it dictate your financial decisions. We just don’t know what is actually going to happen next so we need to get better at living with that reality. Let’s just be certain that there is uncertainty!

There are definitely decisions every investor needs to make, so let me give you five informed decisions:

  1. Do-it-yourself Decision. Should you invest on your own or seek help from an investment professional?
  2. Asset Allocation Decision. How should you allocate your investments among Equities, Bonds and Cash?
  3. Diversification Decision. What specific asset classes should you include in your investment portfolio?
  4. Active vs. Passive Decision. Speculate and try to outsmart the market or use Evidence Based Investing to capture asset class returns?
  5. Rebalance Decision. When to buy and sell based upon risk parameters?

I sometimes get questions about what I think the market is going to do in the New Year. My answer is pretty much the same each year; my crystal ball is mostly cloudy. What’s more important is to understand that the future can look clear from our current reality, but we need to remember life happens. Things will distract us, maybe even pull us way off course. But as long we stay aware of our current reality and where we want to be, we can get back on track and headed towards our goals.

Happy New Year!

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