Winning the retirement game
Consider yourself an athlete in the sport of investing. Physical endurance is important when it comes to sprinting, however mental balance will accompany you in the long run. An investor may have the most reliable information available, but in the absence of emotional control, they may not achieve the goal.
You should live to be the Tiger Woods of investing and when you hit the eighteenth hole, your score is based on the value of the portfolio. Upon retirement, you will know your ranking. Right now, the most desirable position would be team owner, not peanut shooter.
It is in the world of sports, you can find relevant ideas for retirement planning. There are no guarantees when it comes to investing in stocks, however you may want to consider the following attributes shared by the champions.
The first step in developing your portfolio is building an all-star team. Forget about the minor leaguers, you need Sammy Sosa and Randy Johnson to fill your roster. Relieve players with weak relative strength against the index and keep those with strong relative strength. If you are unfamiliar with these changing numbers, contact an investment professional knowledgeable in this area.
Next, limit yourself to the number of players allowed on the field. In soccer, for example, your team may only have eleven players on the field while the game is live. His team is sanctioned by too many players. This seems to be a difficult rule for many investors. As a coach, you may have recruited a college superstar who turns out to be a professional failure.
Don’t let your self-esteem keep the player in the game. Analyze your substitute players and be aware of the time left on your retirement watch.
Although it can be emotionally difficult to get the stocks out, holding them can limit your overall score. You should always focus on long-term fundamentals without neglecting short-term reviews (i.e. annual updates). This does not mean that you become a stock speculator; he just ranks as the number one draft pick.
If resources don’t allow for adequate diversification, or if you’re new to investing, consider hiring a manager. In other words, find mutual funds that are right for your investment risks, time horizons, and goals. Your batting average is no better when you hit a home run than a single. It may be more exciting to post a high slugging average, but even Babe Ruth struck out from time to time.
Another point worth noting is keeping your winners. Unless you can find a better player for that position, let your winners lead you to a championship. John Elway did it for the Denver Broncos in 1999 at age thirty-eight. Remember, we choose our beginners because we believe in their abilities to overcome. Still, it is vitally important to monitor your holdings. You may one day decide to withdraw a player who doesn’t fit into your overall game plan. Until then, stay focused on the goal line and block out the market noise.
In the game of rugby, players advance the ball while throwing it towards another player. The idea here is to look ahead, but never forget what the past teaches us. Players can come and go, but victory never loses its appeal. We are all looking for success in our investment portfolios and a time to take home the gold. Stay positive and dedicate your resources to winning the retirement game.