investing

5 key tips for self-directed investors

No. 4: Maintain the plan
No. 4: Maintain the plan © bikeriderlondon/Shutterstock.com

Devising a thorough financial plan is complicated, but sustaining it isn't easy either. "Everyone needs a roadmap to get to destinations," says Clayton Shearer, a Certified Financial Planner professional who runs Wellness Financial Services in Thornton, Colo. Self-directed investors need to know "how much to invest, a reasonable rate of return to expect and a time frame for the investment," he says.

Devising a written plan that details one's personal investment strategy keeps investors on track. That plan should include a description of how investments will be diversified and the percentage of the portfolio allocated to each one. Since over time the investments will dip or spike at different rates, rebalancing the portfolio annually to conform to the original plan is an important step.

Developing written exit strategies enables self-directed investors to maintain the course. If an individual stock hits your target, it may be time to re-evaluate or sell it and find another growth stock.

When the market plunges, Shearer advises taking a step back and maintaining the plan. "Leave your portfolio alone and let time do its job," he says. Investors who stick to the plan and don't let their emotions overrule can thrive, he says.

advertisement

          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

Need to invest $3K for the long term?

Dear Dr. Don, What's the best place to invest $3,000 for the long term? I'm interested in earning the best rates with low or no fees. Thanks, -- Cheryl Compounds Dear Cheryl, You've got (at least) three questions to... Read more

advertisement

Blog

Dr Don Taylor

Frugal living to build wealth?

What I'm not sure if we should admire Read for the size of his estate or feel sorry for him because he didn't use his wealth during his lifetime for life goals.  ... Read more

Partner Center
advertisement

Connect with us