Written by Dave Young, President of Paragon Wealth Management
"Buy and Hold" strategy doesn't work.
The investment strategy that Wall Street and mutual fund companies constantly promote called “buy and hold,” has been a complete failure over the past 12 years. It has generated negative returns when adjusted for inflation.
Most forecasters completely missed this decline. The majority also missed the recent rebound.
Set your risk tolerance level.
Setting your risk tolerance properly before investing is critical to success. You must be comfortable with the amount of volatility in your portfolio or you are likely panic and sell at the wrong time. Once again, hoards of investors bailed out at the market bottom and then missed the entire rally.
Expect the Unexpected.
When building your retirement plan, hope for the best but plan for the worst.
Remove emotion from your investment process. In the investment world, decisions based on emotion are usually wrong.