As you are developing your investment plan it is important for you to not only develop a plan that works, but you have to develop an investment strategy that will enable you to accomplish your goals.
We've put together an explanation of several investment strategies that are easy to understand and easy to implement. The strategies that we cover now are:
- Dollar Cost Averaging
- Dividend Reinvestment
- Asset Allocation
- Buy & Hold
- Benchmarking Portfolio Performance
A really well thought out investment strategy is going to use a combination of all of the strategies listed above so it's important to understand some basic concepts behind each of them. You need to periodically (at least annually) take a look at your investments and your strategy to determine what is working for you and what isn't. You will also need to look at all of your investments together, don't just look at each account. For example, don't forget that your company 401(k) plan is part of your investment portfolio. Forgetting this can really throw off your overall plan, as you can very easily get overweighted to more risky investments (or underweighted).