Over the past few weeks we listed the components for creating a strategy; now is the time to actually write one. The purpose is to keep us on track to build wealth and attain our financial goals and dreams.
It can be as simple or complex as you need it to be. It's YOUR road map.
You may revise it as life moves along.
Below, is an example I found on the Internet. It is very simple and will give you an idea of how to construct yours. Start simply, you may always add to it, and most importantly, PUT IT IN WRITING. It will be your guide to the future. Without a map, who knows where you may land!
If you need some help, feel free to send me an email.
Be $ Smart - Review the previous steps to create your own investment strategy to build wealth and ensure a financially secure future.
Sample Investment Strategy
OBJECTIVE:
Save $1,000,000 for retirement, adjusted for inflation.
CONSTRAINTS:
30 year horizon.
Moderate tolerance for market volatility and loss, no tolerance for nontraditional risk.
Current portfolio value, $50,000.
Monthly net income of $4,000, monthly expenses of $3,000.
Consider the effect of taxes on returns.
SAVING OR SPENDING TARGET:
Willing to contribute $5,000 in the first year.
Intention to raise the contribution by $500 per year to a maximum of $10,000 annually.
ASSET ALLOCATION TARGET:
70% allocated to diversified stock funds, 30% allocated to diversified bond funds.
Allocation to foreign investments as appropriate.
REBALANCING METHODOLOGY:
Rebalance annually.
MONITORING AND EVALUATION:
Periodically evaluate current portfolio value relative to savings target, return expectations, and long-term objective.
Adjust as needed.
