Advice is cheap and bad advice is vastly over-priced at zero.
However, good advice is often available with no cost and no obligation. I’m sharing some of that advice today. I am not the source, but it is so useful that I feel obligated to pass it on.
There is a problem. Most people tend to shy away from good investment advice because they often believe that they can do better by taking their own course. And maybe you can. But not as a beginner. The earlier you begin, the better your chances of facing retirement with adequate funds.
Here are a few excerpts from rock-solid investment advice from R. P. Seawright who publishes an excellent blog (Above the Market).
I encourage younger traders to read the whole post. It is never too late, making it appropriate for traders of all ages.
Establishing Your Top 10 Investment Default Settings
Every investor — personal or professional — ought to have a clear investment plan based upon appropriate personal considerations, goals and outlooks and every investor ought to stick to that plan unless and until something significant changes. But there is a crucial component of the investment process that gets surprisingly little attention: our investment default settings. We can use them when we aren’t sure what to do, when we’re deciding what to do, when our circumstances have changed but our plan hasn’t (yet), or when we’re just starting out.
The idea here is that we all have default settings — known and unknown, acknowledged and unacknowledged — and that those defaults greatly influence how successful we are and become. Having the right default setting in defined contribution plans make a big difference.
What follows are my suggested default settings.
1. The most important thing you can do is save
2. Invest you must
3. Start Passive
4. 60/40 is a decent start. Asset allocation is a really big deal.
5. Be a cheapskate
6. Tax efficient is better
7. Don’t forget to re-balance
8. Keep it simple stupid (KISS)
9. Have a very good reason to change course
10. Haste makes waste
The details are worth your time.