Published On: Fri, Mar 12th, 2010

GETTING A FINANCIAL “JUMP START” IN 2010

By Steven L. Pomeranz

 

While everyone is looking ahead in 2010 in an attempt to peer into the future direction of the market, I suggest we would be vastly better off doing no such thing.

Statistics show, the forecast accuracy of “so-called” gurus is no better than 50%.  Flip a coin and you would get the same result.

Warren Buffet has always warned about the folly of forecasting and said numerous times he has no idea what the market will do. In fact he says he doesn’t need to know and it doesn’t matter to him. If he purchases great companies at reasonable prices, the market will eventually reflect the value of the business and his fortune will be made.

So if we can’t forecast the future, what do we do?

The answer is simple and beautiful. You only need to know what is or is not under your control and make the proper decisions, accordingly.

Easy Tips to Remember

1)     If you want to invest in stocks, make sure you have a 5-year time horizon and get invested. Forget what might happen over the next few months. It’s immaterial.

2)     Should the market tank once again, make a plan to commit some more money into the market. Remember: buy low, sell high.

3)     Most wealth is created by owning a business. Look for reasonable business opportunities you can afford and go for it!

4)     Diversify. If you are a real estate agent or an architect for example, don’t put all of your nest egg in real estate. If you work for Ford, don’t put all your savings into the automotive industry.

5)     Don’t buy any stock you hear about through a neighbor, broker, insurance agent, barber, bartender.

6)     Make a list of what is in your control and what is not–and take control of what you can.

7)     Remember, economies and markets are cyclical, so if the economy is bad but you still have a job, and 6-12 months of emergency funds, don’t just save your money at 1-2%. Invest it.

8)     Yes, invest when everyone is saving and save when everyone is investing.

Following these simple tips, will help you jump-start your quest for financial security and real wealth.

 

 

 

 

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This column will be write by Steven L. Pomeranz, Certified Financial Planner™, is President of Steven L Pomeranz Financial Management, the host of NPR Radio’s “On The Money!” on WXEL 90.7 FM, and a frequent expert guest on CNBC.  For more than 28 years Steve has been providing wealth management advice to high net worth individuals and has been named on the Top 100 Advisors by Worth Magazine and a Top Advisor by Reuters. Steve is known as the “Investor’s Advocate” for his efforts in educating the average investor and for advocating transparency in favor of these investors. His firm, Steven L. Pomeranz Financial Management is a fee-only firm offering unbiased advice.

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