Investing

Here are a few thoughts I have with regards to investing properly and to make sure retirement is a possibility. It is imperative that you begin saving a certain percentage from your paycheck and invest it into something that is very balanced. That means broad stock and bond funds (or indexes) that have performed well for the last 15 years. The last five years have taught us the Mr. Market can react with wild swings that can make the most savy traders shudder. If one tries to beat Mr. Market, a lot of work is needed. I believe very intently on what Ben Graham, David Dodd, and Warren Buffett have to say about investing with a value bias. It makes sense to buy something that has a large margin of safety and should return good returns over the long run. Financial Advisors provide some assistance if you can find one that is trustworthy. Make sure they provide what is called "Alpha", or better returns with lower risk. Risk is the key. By making sure your portfolio never declines over a large degree (i.e. 5-15%), you will have a higher base to compound from. Remember that compounding is the most powerful tool you have to accumulate wealth. That means if you began with $100,000 and saved $50,000 per year for 20 years (assuming a small 5%), you would have $926,648.65! These are some beginning thoughts for investors who find this page. I will have more postings about financial theories like EMT and modern portfolio theory.