Market dips are inevitable. If you have been saving for retirement for decades, then you are no doubt aware of market fluctuations and have weathered a few yourself. Continue reading
Asset allocation is the next step in the investment process.
Your asset allocation involves two steps:
- Decide which index funds to include in your
- Choose how much of your portfolio to place in
After you decide which investments to include in your portfolio,
you need decide how you want to combine them. Your asset allocation has a much greater impact on your investment performance
than the individual investments you pick.
The asset allocation process is as much about managing risk as it is about investment performance. In fact, the process lets you deliberately manage your risk. Continue reading
Are index funds good investments for retirement? If you’ve done any amount of reading on investment strategies, you have certainly heard about index investing. In this article I’m going to explain WHAT index investing is and WHY it is such a good strategy for your retirement.
This article goes a little deeper into market theory, so I
want to give you the bottom line up front.
- Index investing simplifies investment selection. When you invest in an index, you are investing in all of the stocks that make up the index and make no attempt to pick the “best” ones. That is good because picking the out-performers is largely a function of randomness.
- You inherently accept the average market return.
- Investing in an index can dramatically reduce your investment expenses.
- The result is that you end up with the average market return, at a lower than average cost. You’ll be slightly ahead.