The Fundamental Rules of Smart Investing Haven’t Changed

Financial Advice from a MN Financial Advisory Service

First things first: It doesn’t matter if you make your investment decisions online, on the phone, or in a face-to-face meeting with a trusted financial professional– the same time-tested rules of prudent portfolio management apply.

For example, your asset allocation (i.e., your overall mix of investments) should always complement your personal financial priorities and goals. The best way to accomplish that is to leave emotions out of the investment-decision process and stay focused on your well-reasoned objectives and strategies. Instead of blindly following “hot” tips from friends or tantalizing suggestions posted anonymously on Internet message boards, ask yourself the following questions:

Why is this investment appropriate? Does it make sense in light of your risk tolerance, time frame, and financial objectives? How will it affect your portfolio’s asset allocation? If you lack the information to answer such questions, hold off on the transaction until you’ve had a chance to conduct more research. Always be sure to read an investment’s prospectus before you invest.

What type of fees and other expenses does the investment charge to shareholders? How much will it cost you to buy-or sell- shares?

What is the investment’s long-term performace history? If it is an individual security issued by a relatively new company, are you comfortable with the firm’s managment and market strategies? If you’re considering a mutual fund, how does its performance compare with that of comparable funds?

Is the investment “liquid” – i.e., could you sell it easily if the need arose?

© LPL Financial, created by Standard & Poors

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.


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