KEY APPROACHES TO INVESTING
Like our approach to budgeting, our approach to investing is also to leverage research-proven best practices, technology, and automation. In that spirit, below are some of the major themes that we use in how we advise our clients.
Like our approach to budgeting, our approach to investing is also to leverage research-proven best practices, technology, and automation. In that spirit, below are some of the major themes that we use in how we advise our clients.
- 80% of funds do not beat the indexes, and far fewer can do so consistently (less than one-percent can do so for 5+ years in a row)
- Therefore, select life-cycle, asset allocation, and index funds (automation and low expense ratios)
- Select investments/savings based on the time horizon of when you expect to need the money:
- < 1 year = savings account or money market
- > 1 year and < 5 years = short-term bonds or certificates of deposit (C.D.s)
- > 5 years = mutual funds, exchange-traded funds (ETFs)
