Episode 27 – Top Investment Lessons Learned by 40

Mike's turning 40! As he hits this milestone, they guys explore the lessons he learned over more than 17 years in the financial services industry. Mike and Chad will reflect on the top 10 lessons learned from these experiences in this week's episode of the Financial Symmetry Podcast. 

Top 10 Investment Lessons Learned

Following the crowd is not a recipe for investment success. It’s OK to be different. Sometimes saying no is the best decision. Making yourself more marketable and attractive to employers through personal development will only help you in the long term through increased earnings and job security. Limit your employer’s stock to no more than 5% to 10% of your portfolio. Take the emotion out of investing by setting up an automated investing schedule. Don’t get caught up in the short-term noise; focus on the things you can control. A diversified mix of stocks and bonds gives you a better chance of sticking with your investment plan than a 100% stock portfolio. Stocks may provide a greater long-term return, but if you sell at the bottom it doesn’t matter. Implement and follow an investment strategy and stick with it in good times and bad. If you don’t have a strategy, implement one or have a financial planner help you. If you can avoid pouring too much money into equities when the market is riding high (March 2009) or too little when it’s sinking low (October 2007), you’ll be better off. Studies by Vanguard, Morningstar and Dalbar show the average investor trails the market by 1.5% to 3% per year due to poor decisions caused by wanting to jump on the latest fad. Time is your best friend: Implement a disciplined investment strategy, be patient, focus on what you can control (savings, taxes, and so on) and avoid a big mistake. If you can’t do this, hire a fee-only financial planner to help you stay on track.