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Investment best practices: Set yourself up for long-term success

Keep these best practices in mind to set yourself up for success.

Have a plan

Your advisor can work with you to build a plan that reflects your goals and priorities. Putting your goal in writing will help you stick with it. And without a structured, consistent focus, it’s easy to lose sight of your goals when markets change. A documented plan can also act as a compass and help you measure your progress over time.

Embrace diversity

Spreading your investments across asset classes and geography is an easy way to manage risk. So when one asset class declines in value, others can soften the impact on investment returns. And both you and your portfolio will benefit from a less bumpy ride.

Check in

Even in a well-diversified portfolio, some investments may outperform expectations, and others might under-deliver, creating an occasional imbalance in your allocations across your portfolio. Even though rebalancing occurs within many investment solutions, it’s good to have regular reviews. They can help determine if you need to make adjustments as the investment conditions change or your financial situation or goals shift.

See the big picture

While markets can have their ups and downs, it’s important to put it into perspective. Historically, markets rebound after a downturn, and the economic outlook ultimately improves. Avoid the temptation to make sudden moves based on a negative news report. If the bumps in the market make you nervous, your advisor can suggest approaches that can help your investments stand up to fluctuations and reduce your level of risk.

Find the opportunities

If markets drop, a well-built, well-diversified portfolio filled with quality investments will be in a better position to hold its ground over the long term. And when you stay in the market and continue to invest consistently, you can take advantage of dollar cost averaging. A fundamental investment strategy, dollar cost averaging is when you buy the same dollar amount of a particular investment on a regular schedule, regardless of the price. Over time, you pay the average cost for the investments you’re buying – when the cost goes up, fewer shares are purchased. But when it goes down (i.e. during a market downturn), you end up buying more.

Being a successful investor is about patience, diligence and communication – the patience to weather the bumps in the road, the diligence to keep up your contributions even when life gets expensive and open communication with your advisor. Together, you can create a personalized plan designed for success to help you reach your goals even sooner.