Investment Advice from the Experts
In life, it's just as important to gain an understanding of your weaknesses as it is to know your strengths. For physical traits, we are often limited in overcoming our genetic deficits. For mental acumen, we are fortunately blessed with the ability to increase our capacities. Much to our advantage, the internet has opened up our ability to easily connect and learn from experts in every field imaginable.
Although I have spent the majority of the month writing about portfolio investing, I am by no means the foremost expert on this subject. The world is full of more brilliant minds, some of which are courteous enough to share their thoughts and research openly. That is why I reached out to the guest contributors highlighted today, as I would be doing a disservice if I failed to share a bit of wisdom from some of the more investment savvy minds that I regularly follow, and that inspire me on a consistent basis. Their expertise is expansive, so in order to make things digestible, I asked them this:
In 1-3 sentences, what is some quick and simple advice and/or knowledge you can pass along that could help make the everyday person a better investor?
Below, you will find their responses. I hope you enjoy, and make an effort to apply these nuggets of wisdom towards your own financial journey. I also encourage you to follow each of them on your own time as well, so that you continually learn and enhance your portfolio investing knowledge.
Know your time horizon and invest accordingly. If you are investing for the long term, don’t worry about – much less react to - short term events.
Investment success is not about skill…it's about behavior.
We all get just one shot at making the financial journey from here to retirement. Failure is not an option. What are the implications? We should do everything possible to stack the odds in our favor--save diligently, diversify broadly, minimize investment costs, hold down taxes and buy insurance against major threats to our financial future.
In order to be a good investor, you have to start by simply being able to know and track how you’re doing. Not just with respect to your investment accounts, but your household cash flow, and whether you’re managing your finances effectively to be able to save in the first place – since the reality is that when you’re getting started, WHETHER you save and invest is actually even more important than the returns you get ON those investments! So if you haven’t signed up for a platform like Mint.com yet, to automate the tracking of your household finances, start there first!
Michael Kitces, MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL, Partner and Director of Wealth Management at Pinnacle Advisory Group, Co-Founder of XY Planning Network
Author of Nerd's Eye View and Host of the Financial Advisor Success Podcast
Twitter handle: MichaelKitces
A very special THANK YOU from me to all four contributors! They are all extremely busy individuals, so I really appreciate the time each took to share their insights with us here.