Top 10 Tips to Managing Your Investments

1.     Start by defining your investment goals and objectives, and develop a plan to achieve them. This will help you to stay focused and on track, and will provide a framework for making investment decisions. You should start with your current savings and expected savings and then divide your savings into short term cash needs for the next six months and the remaining savings can be invested.

2.     Diversify your portfolio by investing in a range of assets, such as stocks, bonds, and cash. This will help to reduce risk and improve your chances of achieving your investment goals. If you are young and saving actively you can invest at least 60% in stocks and 35% in bonds with the rest kept in cash (checking, money market accounts, savings account or short term CDs). Most people find it useful to invest in passive index funds as individual stocks or active funds can be more complicated and expensive. Investing in 2-3 fixed income funds and 2-3 equity index funds may be all you need. Keep it simple. 

3.     Understand the risks and rewards associated with different investments, and make sure to balance your portfolio in a way that aligns with your risk tolerance and investment objectives. Generally, a greater allocation to stocks (AKA equities) is riskier than a portfolio allocated to bonds. However, underinvestment in equities could make you more vulnerable to inflation and slower building of your wealth. 

4.     Review your portfolio regularly and make adjustments as needed in response to changes in the markets or your personal circumstances. Typically you would review your portfolio no more than quarterly. Changes should generally be driven by changes in personal circumstances. It is generally not a good idea to make large, frequent changes to your allocation based on market timing, news headlines or external shocks.

5.     Use tools and resources, such as TPE's portfolio tracking software and asset allocation tools, to help you monitor and manage your investments. See links below.

6.    You generally want to invest in index funds tied to broad market indices like the S&P 500 or the Nasdaq 100. Investing in individual stocks or active funds should be avoided. Active funds tend to be expensive and generally don't perform better than index funds and individual stocks can leave you exposed to concentration of risk. However, some of the more popular funds may have an excess concentration in 5-10 stocks so consider further diversification by investing internationally or sector funds. 

7.     Consider seeking advice from a professional financial advisor if you are unsure about how to manage your investments or if you need help with more complex decisions. Most people find professional advice expensive and not worth the investment. At TPE we try to provide tools for DIY, but outside expertise should be part of the mix. 

8.     Avoid making emotional or impulsive decisions, and try to maintain a long-term perspective when managing your portfolio. Frequent trading or timing of markets is a mug's game. Set it and forget it works well (of course with frequently monitoring and adjusting as life circumstances change).

9.     Don't put all of your eggs in one basket, and avoid making concentrated bets on individual stocks or other assets. And avoid the temptation to concentrate your investors in the stock of your employer.

10.  Be disciplined and consistent, and remember that managing your investment portfolio is a long-term process that requires patience and commitment. 

See below calculators that you may find useful in your investment journey. 

Portfolio Allocation Tool

Portfolio Valuation and Analysis Tool​