Whether we're experiencing a so-called flash crash or a raging bull, the markets can be turbulent. But no matter what's happening in the financial world, these enduring tips can help you achieve investment success.
Review your financial plan. It's important to revisit your financial plan from time to time to ensure your goals still align with your risk tolerance and time horizon. This is especially important if you've gotten married, bought a home, or made other significant life changes. Don't yet have a plan? Get started by learning the basics of financial planning.
Stick to your asset allocation. Keep your mix of stocks, bonds, and cash aligned with your investing goals. If the market's ups and downs have caused your allocation to shift, be sure to rebalance your portfolio.
Keep it simple. Rather than trying to beat the market, consider investing in broad-based index funds, which seek to track the performance of a market benchmark. It's an easy way to diversify your portfolio and keep your investing costs low. Low-cost investing lets you keep more of your returns—and over time that could translate into a net performance edge.
Control your taxes. Taxes can nibble away at your long-term investment returns, so learn how to be a tax-savvy investor and you can make the bite less painful.
Save as much as possible for retirement. Be sure to take full advantage of your retirement savings options. If you own an IRA, remember that you have until April 18, 2011, to make a contribution for 2010. And if you're age 50 or older, you can save up to $6,000 in your IRA for the 2010 tax year—that's $1,000 more than the standard contribution limit.
Manage your debt. Don't let excessive debt control you. Creating a budget based on what you have—not what you can borrow—and spending less can help you take control of your debt.
Follow these investing basics and you'll be better prepared to weather any market condition.
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