There is no such thing as a perfect portfolio [Video]


By Sam Instone - November 20, 2018

There may be times when it pays to aim for perfection. 

But investing isn’t one of them.

In fact, it’s counter-productive.

There is no single optimal portfolio.

It’s far more important to have a portfolio that you understand and that you’ll stick with when markets are volatile.

Find out why behavioural expert and former financial adviser, Carl Richards, thinks perfect is the enemy of the good.

 

 

When it comes to investing, no one knows what perfect is.

Instead of arguing about asset allocation, specific investments or media noise…

Focus on getting started.

There are really only 3 steps you need to know:

1. Build on the right foundation

In order to start on the right path towards financial freedom, it's essential tpartner with a fiduciary who is ethically bound to have your best interest at heart.

In summary they:

  • Put their clients’ best interests before their own
  • Seek ways to maximise their clients’ money
  • Act in good faith and provide all relevant facts
  • Avoid and disclose relevant conflicts of interest
  • Do their best to ensure they provide accurate and thorough advice

The term usually refers to someone who manages assets on behalf of an individual, family or company.

Situations requiring total trust, good faith and honesty.

This certainly seems a far better place to begin than considering taking advice from a non-fiduciary.

2. Spend less than you earn

Most wealthy people talk about their investments, not their spending.

You can begin by avoiding spending large lump sums and focus on the long term.  

And to put your retirement plans into action, while there is still time. 

3. Invest wisely

You need a globally diversified portfolio invested in the world’s greatest companies to ensure investment success.

It will pave the way to preserve and grow your wealth over the years to come. 

You would benefit from the growth of the entire market, avoiding trades that attempted to predict what’s ‘hot’.

Once set up, it can be left alone for the markets to do the work for you. 

Follow these, and with a firm financial plan in place, your portfolio will be as perfect as it’s ever going to be.

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