Investing Over a Working Lifetime

Asset, allocation, is, key., It, refers, to, how, much, money, you, put, in, stocks,, bonds,, and, cash., This, decision, shapes, your, long-term, results, more, than, the, specific, stocks, you, choose., It’s, not, an, obvious, fact,, but, it’s, incredibly, useful., You, can, choose, your, allocation,, while, picking, individual, stocks, is, a, game, against, experts.

Your, allocation, depends, on, your, investment, horizon, and, how, much, volatility, you, can, handle, without, selling, at, the, worst, time., These, two, factors, are, different., Your, ability, to, take, risk, is, a, math, problem., Your, willingness, to, endure, a, 30%, drop, without, panicking, is, about, your, temperament., If, you, ignore, your, temperament,, your, plan, will, fail, right, when, it’s, most, critical., Losses, only, become, permanent, when, you, realize, them.

Dollar-cost, averaging, means, investing, the, same, amount, regularly,, no, matter, the, price., The, biggest, advantage, is, psychological., It, takes, the, guesswork, out, of, when, to, buy., People, often, hold, off,, waiting, for, the, perfect, moment, that, never, comes., This, method, automatically, buys, more, shares, when, prices, are, low, and, fewer, when, they’re, high.

Fees, compound, just, like, returns,, but, in, the, wrong, direction., A, 1%, annual, fee, doesn’t, just, cut, 1%, from, your, outcome., Over, thirty, years,, it, takes, away, a, significant, chunk, of, your, final, balance., Each, dollar, lost, stops, compounding, for, the, entire, remaining, period., This, is, similar, to, the, argument, for, paying, off, loans, early,, but, in, reverse.

Finally, the, type, of, account, is, as, important, as, your, investment, choices., Tax-advantaged, retirement, accounts, can, significantly, improve, your, after-tax, returns., Plus,, an, employer, match, is, an, immediate, gain, that, no, investment, choice, can, reliably, outperform., The, account, you, choose, often, has, a, bigger, impact, than, what, you, invest, in.