November 2, 2012
Recently, clients have asked me which vehicle is the best investment. My response is that everyone’s portfolio should be diversified and managed well of course. Actually finding someone to do this for you on a daily basis is difficult. Most advisers won’t do this. Most of them make adjustments on a quarterly or monthly basis. The problem with that, is those adjustments aren’t always the right time to implement change. From my experience, most advisers will make daily adjustments to your portfolio if you have a significant amount of money.
How do you get around this biased unfair treatment? My advice is to learn how to make the adjustments yourself as you see fit. Or even better as you see the goal being met. For example, a stock might seem interesting and attractive to you – so you want to buy it. My opinion is to set a goal as to how much money you can realistically make on this investment. Set a limit order to sell when the stock hits that price. You won’t have to watch it every day and you will eventually earn your money.
My favorite investment is real estate. It is always tangible and you can always do something with it. If the market isn’t good for selling; you can rent it and enjoy monthly income from it. If the market is good; you can sell it and make money. The trick with real estate is to buy it at its lowest market values. This is where the money is actually made.
When investing, it is best to keep your emotions out of the picture. Only invest what you can really afford to lose. If you are using money that you might need to live on within the near future, do not invest it. This helps remove the emotion from the picture.