Academic research has identified specific characteristics or “dimensions” of risk that produce higher expected returns over the long run. Over the long run, stocks out-perform bonds, smaller companies out-perform larger companies, value companies out-perform growth companies, and higher profitable companies out-perform lower profitable companies.
Once you have established how much you should have in stocks, then “tilt” your stock portfolio to the areas that drive long-term returns. For your bond portfolio, there is no need to take on more risk than you carry in your stock portfolio, so stick to bond portfolios that are designed more for principal protection than the highest yield (income) possible.
Episode 22 - 10 Steps to a Better Investment Experience - Step 10 – Focus on What You Can Control
Episode 21 - Step 9 – Ignore the Financial Media
Episode 20 - Step 8 – Manage Your Emotions
Episode 19 - Step 7 – Avoid Market Timing
Episode 18 - Step 6 - Practice Smart Diversification
Episode 17 - Step 5 - Taking the Right Risks
Episode 16 - Step 4 - Let the Markets Work for You
Episode 15 - Step 3 – Don’t Chase Past Performance
Episode 14 - Step 2 - Don’t Try to Outguess the Market
Episode 13 - Step 1 - Understanding Market Pricing
Episode 12 - Can I Retire?
Episode 11 - Use A Coach Or A Teacher
Episode 10 - Create A Map - An Investment Policy Statement
Episode 9 - Manage Your Emotions and Stay the Course.
Episode 8 - Know How Much Your Investments Cost You.
Episode 7 - A 10% discount is a good deal; A 20% discount is a better deal.
Episode 5 - Find Your Balance
Episode 4 - Start Saving Towards Your Goal(s)
Episode 3 - Identify Your Goal(s) and Write Them Down
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