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How can you become a ‘healthy’ investor?

Posted April 22, 2015 in Advice Column, Beaverdale

May is National Physical Fitness and Sports Month. This “month” is designed to encourage people to follow a healthy, active lifestyle, and why not carry the concept to other areas of your life — your investments?

Give your portfolio a regular “check-up.” To maintain your fitness, visit a doctor for a check-up on a regular basis. And to help ensure the “health” of your portfolio, review it with the assistance of a financial professional — someone who can point out gaps in your existing holdings or changes that may need to be made.

Follow a balanced investment “diet.” Nutrition experts recommend we adopt a balanced diet, drawing on all the major food groups. Too much of any one category can lead to health concerns. If you own too much of an asset class, such as aggressive growth stocks, you expose yourself to an “unhealthy” degree of risk, because of a market downturn. Not all investments move in the same direction at the same time. If you own a mix of stocks, bonds, government securities and other vehicles, you can lessen the impact of volatility on your portfolio. In investing, balance and moderation are important.

Don’t let investments get “lazy.” Exercise is essential in staying fit and healthy and can  be hard work.  Some investments may not be working hard enough for you.  You might own many certificates of deposit (CDs). There’s nothing “wrong” with CDs, and they do offer a high degree of preservation of principal, but provide very little return, particularly in a low-interest-rate environment, such as the past few years. If you have a plethora of CDs, you might be depriving yourself the opportunity to own investments that “work harder” by offering the growth potential you need to make progress toward your long-term goals.

Avoid “unhealthy” habits such as eating too much or failing to address stress. As an investor, you could waste time and effort chasing after “hot” investments, or you could decide to take a “time out” from investing when markets are turbulent. Another bad habit: Investing either too aggressively or too conservatively for your goals and risk tolerance.  Avoiding these and other negative habits, and stay on track toward your objectives.

It takes diligence and vigilance to stay physically fit and healthy.  These same attributes are just as important in keeping your investment strategy in good shape.


Information from Edward Jones, provided by Jim Talley, financial advisor at Edward Jones, 2703 Beaver Ave., 279-4179.


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