Ladies, you could stop worrying about your investments by taking control with three Free Market steps to making better investment decisions. Stop worrying about your money not working hard enough to support your lifestyle, or missing out on the market.
Have you heard about the Free Market Philosophy? It may just change your life! Using the Free Market Philosophy, it may be possible to lower your investment costs and taxes, reduce financial confusion and feelings that you are out of the “financial loop,” and, best of all, eliminate the feeling of having to change your portfolio due to the economic conditions. These steps may also help you avoid financial companies who have had scandals, primarily companies that frequently move money by chasing the market or the next hot stock.
These three steps are based on the only Nobel Prize-winning academic investment strategy, Modern Portfolio Theory, which is a major component of the Free Market Theory:
- Invest consistently in sixteen to twenty-two different institutional asset class mutual funds, available from fee advisors. Research has proven that more than 91% of your portfolio’s return comes from diversification, not stock picking or market timing. Your portfolio must be consistently globally diversified in both stocks and bonds. Each asset class mutual fund invests in only one level of market risk and could give you a sizeable savings, mostly from hidden investment costs.
- Stop losing money! Saving for your future is first about not losing money! All asset classes have cycles, so pick a Modern Portfolio Theory money manager that correlates your asset class mutual funds for you, using dissimilar asset classes, and commits to frequently rebalancing your portfolio back to its original “target” correlations. Trillions of dollars were lost by growth investors in 2000 through 2002, because they invested most of their money in similar investments, such as the S&P 500 asset class, which lost more than 45%*. Modern Portfolio Theory investors only lost 8.2%** and recouped their losses within six months after the 2000 to 2002 soft market! Past performance is no guarantee of future performance.
- Stop moving your money! Free Market investing is a lifetime strategy. Once you are prudently diversified, stay put. Changing your portfolio is expensive. Every time you move your portfolio, you lose and the financial institution wins. The longer your portfolio is invested in the Free Market, the better your returns will be and the lower your investment risk.
Time is your friend as long as you stay the course, diversify globally, and rebalance prudently. Ladies, it’s time you take action!
Maria J. Kuitula, a Free Market and Stewardship Coach, co-authored the book Stress-Free Investing, available at Amazon.com. She is the President of Wordhouse Wealth Coaching and may be reached at 616-460-6518 or at [email protected] For question lists and investor education videos, go to www.WordhouseWealthCoaching.com. Photo: stock.xchng
*DFA Returns software 12/11
** Matson Money Asset Class Returns chart for years 2000-2002