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In
summary, here
are four simple
rules to help
you put your
asset allocation
planning in
the context
of an overall
investment
strategy:
1.Prepare
a financial
plan:
Another reason
we keep emphasizing
this point
is simply
because--
surprise,
surprise--
too many investors
dont do enough
planning or
saving and,
therefore,
they are unprepared
for the future.You
need a Plan.
2.Save
on a regular
schedule:
Research studies
indicate quite
clearly that
today's average
investors
are only saving
about one-third
of what they'll
need for retirement
or any other
goal.If this
describes
you, change
the pattern.Make
sure you're
above the
average, more
like 10% than
3%.Regular
savingd are
essential.
Clearly the
trick is to
plan your
savings in
accordance
with the goals
that are indentified
in you financial
plan.
3.Stick
with your
portfolio's
asset allocations:
Don't jump
ship every
time you hear
the press
making noise
about a short-term
correction--
because you
will hear
those hints
often.the
market will
have bad days
(and weeks
or months).Assuming
you're one
of the new,enlightend
breed or responsible,
do-it-yourself
investors,
you know that
long-term
investing
is the way
to go.So stick
with your
allocations.Review
and rebalance
your portfolio
as needed.
4.Stop
chasing hot-funds-of-the-week:
Avoid the
temptation
of constantly
chasing after
the latest,hottest,multi-starred
fund or the
well-marketed
darling fund
manager being
hyped by the
financial
press.If you
give in to
the hype,you
might expose
your portfolio
to higher
risks, usually
at the expense
of the overall
asset allocations
developed
using financial
planning tools
in the first
step above.
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