Peter Altman, a friend of mine and a veteran investment professional, with a long-term “value” orientation, offers his top tips below for both established and newer investors!
- Be objective! People are by nature highly emotional when it comes to their finances. When it comes to reviewing your year-end results, utilize appropriate benchmarks that are consistent with your risk tolerance and long-term goals.
- Be proactive! Reflect upon the past year. Instead of reacting to short-term disappointments, find solutions that will help you to avoid making similar mistakes again.
- Get engaged and don’t worry about timing! Your biggest asset is time. Don’t waste it on the sidelines like a deer in the headlights. Be open-minded and humble – and learn to relax. Stay focused on your long-term goals and resist the temptation for market timing and reacting to headline hype.
- Think diversity! Be sure to diversify your holdings within industry groups. Make sure that no one investment is too great a portion of your portfolio. This can permanently impact your portfolio returns and hinder long-term objectives.
- Start young! Albert Einstein supposedly referred to compound interest as “the eighth wonder of the world.” So for those of you who are thinking about setting up an investment portfolio, remember that the younger you start investing, the less you will have to invest to benefit from the same yield. It’s the compounding with “singles and doubles” that achieves reasonable goals.
- Regardless of your age … start saving for retirement! Retirement remains the #1 reason people invest. Young graduates who are embarking on their career should consider opening up an individual retirement account (IRA) that may be offered as an employee benefit. It’s the best gift you can give yourself, and will help insure the lifestyle you want in your later years.
- The future will be full of unknowns - count on it! So beware of “wizards” who claim to predict the future without any “divine inspiration”. An investment professional may provide sound advice and guidance, based on thoughtful and disciplined research, but there’s never a guarantee.
- If you’re a “seasoned” investor, add some spice to your investments! Are your fixed-income investments heavily geared towards high-yield or long-dated maturities stretching for income? It might be a good time to swap into higher-yielding quality equity alternatives.
- Long-term homeowners … consider tapping into historically low interest rates. You may want to take advantage of low rates by fixing a larger portion of your debt rather than float. The housing market has recovered in many cities this past year, and refinancing your primary residence (if you plan to stay in your home) may stabilize or lower your living expenses.
- Review your mix of investment asset “classes” (i.e. stocks, bonds, hard assets) Does your portfolio reflect your risk profile? Are you too biased towards equity (stocks), fixed income markets (bonds) or real estate and need to make adjustments? Remember if you don’t rebalance the winners and losers, you effectively make bigger bets on larger positions – not a good idea long term.
After 20 years of managing investment portfolios, Peter launched a boutique investment firm Altman Investment Management, LLC in 2001 in Princeton, N.J. His firm caters to individuals, families, and institutional investors, and provides a thoughtful, highly personalized approach to individually managed accounts – including retirement plans and trusts. He is dedicated to helping his clients grow and preserve their wealth, successfully managing clients’ assets through various economic cycles and from one generation to the next.
No matter where you live, consider tapping into the expertise of a reputable investment professional. He/she can offer you advice for your individual circumstance, and ensure that your portfolio is poised to take advantage of opportunities in 2015 and beyond. The sooner you get started, the more opportunities you will have to grow and preserve your assets.
For more information visit http://altmaninvest.com/ or call 609.252.0048.