Water Well Journal
Issue link: http://read.dmtmag.com/i/573697
6. Failing to properly allocate assets Among the asset classes that should be carefully allocated in every investment portfolio are stocks, bonds, cash, and cash equivalents. Proper allocation depends on such variables as your age, the size of your portfolio, and your risk tolerance. While most professionals agree every portfolio should contain a propor- tion of stocks, the share of stocks should decrease in favor of a higher allocation of cash and bonds as the investor ages. It's too easy to end up with a portfolio consisting of some- what random investments unless careful consideration is given to proper allocation. Most brokers will offer advice on proper asset allocation and much help is available online and in investment publica- tions. For more information about asset allocation, see the sidebar. 7. Failing to rebalance periodically Once you have worked out a proper asset allocation, it's important to remember many external changes can shift your allocation away from your original. For one example, stock prices may rise, increasing your desired proportion of stocks. That's why it's mandatory to examine your portfolio on a regular basis to see if rebalancing is necessary. Some advisers suggest rebalancing should be done at least annually. There are of course many other possible investing mistakes that can alter your financial performance. However, carefully avoiding common mistakes such as these seven can help to smooth out your road to a financially secure future. Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult an accountant or tax adviser for advice regarding your particular situation. WWJ WWJ October 2015 57 Twitter @WaterWellJournl Bill Lynott is a management consultant, author, and lecturer who writes on business and financial topics for a number of publications. His book, Money: How to Make the Most of What You've Got, is available through any bookstore. You can reach him at wlynott@cs.com or through his website: www.blynott.com. "Introduction to Investment Planning" http://sw-advisors.com/your-family/investment-planning/ investment-planning-intro "Six Asset Allocation Strategies That Work" www.investopedia.com/articles/04/031704.asp Learn with Business Workshops at the Expo There are several business management workshops at the NGWA Groundwater Expo covering contracts, payments, taxes, and more. Check out page 29 and www.GroundwaterExpo.com for more information. Reduce cos Increase ef Improve pr st. fficiency. roductivity. m G 800 551.7379 800 551.7379 A NGW NGWA . www www 9 • 614 898.7791 9 614 898 7791 e e or or okst okst o g/B g/B .or A