Why do investors perceive heightened volatility as such a bad thing, and why are they prone to liquidating stocks during steep market sell-offs? From January through mid-March of this year, retail investors pulled out a net $40 billion dollars from global equity funds. Read what I think you should do to try and achieve a 6 percent or even 5 percent portfolio return over the next 30 years.
The Three Principles
1. Save for a rainy day.
Develop a long term financial plan.
2. Don’t put all your eggs in one basket.
Diversify in different asset classes.
3. There is no such thing as a free lunch.
Capture the entire return of each basket, or asset class, through low cost index funds.
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