Clark Wealth Management Group - ScotiaMcLeod Fredericton

This week we focus on helping people avoid doing the wrong things – while doing the right things with their important money. Financial success takes time and discipline. At times like this the discipline piece is toughest.

A quick scan of world news headlines this week make clear the reasons investors are feeling uncertain. Whether there’s actually more happening than ever before or whether the unprecedented 24/7 television news coverage is making it appear that way is a debate for another day. Whatever the case, many investors can get off track at times like these so it’s best to get back to basics.

By following the six principles below, we believe investors can improve their long-term financial success.

1. Have a plan and stick to it
Financial success requires a game plan and the discipline to stick to it. A good plan outlines your goals as well as the risks you are willing to take. Your plan will prevent you from taking on more risk than you should when markets are rising, and will help you make appropriate decisions when the world appears to be falling apart.

2. Be diversified and balanced
Don’t put all your eggs in one basket. With a personalized plan and a balanced portfolio that includes stocks, bonds and cash, you can reap the benefits each of these assets offers. Diversification can both improve return and reduce risk in a portfolio by offsetting weaknesses in some areas with the strengths of others.

3. Think ahead – at least five years
With today’s higher volatility levels, thinking ahead is more important than ever. Large intra-day swings can make you feel you’re missing major opportunities to enhance returns or scare you into focusing on the present. Today’s all-consuming news story will likely be reduced to a whisper in three months time. Evidence is clear; timing the market just doesn’t work reliably.

4. Buy and retain quality
The best way to avoid pitfalls is to focus on quality. It’s a difficult term to define, but there are a number of good indicators. Financial stability and strength as measured by low and manageable debt levels, a stable history of profit and dividend growth, and a strong management team are some of the factors that tend to define quality investments.

5. Review, reassess, and rebalance
Monitoring your plan and investment portfolio is just as important as creating it in the first place. Capital markets change, and so will you with wealth and age. Making the necessary adjustments will ensure that you are headed in the right direction. The process of planning, reviewing and rebalancing will ultimately ensure financial success.