|Women at Work: Traditional financial basics are often the best course to follow by Mary Spurrier
As important as it is to monitor your investments, sometimes the best thing an investor can do is take a break from checking. Regardless of short-term market volatility, staying the course almost always makes sense, especially if the investments are long term, such as a 401(k). Reacting to daily, weekly or even monthly market corrections can potentially hinder your long-term financial goals.
Traditional finance is a basic finance principle that can play a valuable role in helping you keep your retirement investing on track by following its four main components.
Pay yourself first. This is simple but difficult. Always put some money into savings and investments first, before paying any other expenses or creditors. Decide what the best investment vehicles are for you and set up a regular savings schedule. The process of doing this is more important than the actual amount you put away.
Diversify your investments. This does not guarantee a profit or protect against a loss, but if done correctly it will help cushion the ups and downs.
Markets tend to revert to the mean. In other words, conditions are not likely to remain as good or as bad as they currently are.
Balance risk and reward. Work to develop a comprehensive risk tolerance profile to determine appropriate investments. If you are too conservative you will not reach your goals, but if you are too risky you may lose too much money.
Additional strategies to keep in mind: Think rationally before acting. It is easy to let sensational headlines scare you and affect investment decisions. Instead, stay the course and remember your long-term goals. Take a sensible "allocate, diversify, rebalance" route to investing.
Remember that paying attention to headlines instead of staying your investment course will only hinder your long-term financial well being.
Spurrier CFP is the president/principal of M Spurrier Financial Services LLC. She can be reached at (585) 271-5280.
This column is written by members of the Rochester Women's Network (www.rwn.org), which seeks to help women connect, grow and succeed.