6 Investing Tips for Today's Market

Succeeding in this market takes persistence, monitoring, and commitment

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The S&P 500 has nearly doubled since reaching a low point in March 2009. Many factors impact the economy and the markets including high energy costs, financial problems in many European countries, and our own debt issues in the U.S.

That said, here are six investment tips to consider:

It isn't different this time. There will always be issues facing investors. There has always been some sort of event happening in the world that many "experts" thought would be our economic undoing. With all due respect to the folks at PIMCO, I'm not so sure that what they call a "New Normal" is anything more than a continued evolution of our economy and the investing environment.

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Start with a financial plan. A clear understanding of your goals, your time frame to achieve those goals, and your risk tolerance is a vital first step in determining your asset allocation. Investing without this type of vision and direction is the first step down the road to failure.

Save as much as you can. Recent studies have shown that the biggest factor in accumulating enough assets for retirement or any financial goal is the amount saved. While investment returns are important, saving on a regular basis is vital.

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Asset allocation is critical. Studies have shown that how you allocate your investments accounts for 90 percent or more of the return from your investments. The "lost" decade of 2000-2009 certainly reinforced this notion. While returns from large-cap stocks were flat or slightly negative, other asset classes such as bonds and small-cap stocks held up fairly well. While not a great decade, diversified portfolios still did reasonably well.

Monitor your holdings. It is important to review your holdings regularly against appropriate benchmarks. This includes mutual funds, exchange-traded funds (ETFs), and individual stocks. Even index funds need to be reviewed to ensure that costs remain low and that the fund is tracking its benchmark closely. For actively managed funds, make sure the manager is earning the extra fees they are charging over and above an index fund in the same investment style. For stocks, how is the holding doing against peers in their industry? Set a target selling price for each stock before you buy it.

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Seek professional guidance if you need it. Is this comment biased and self-serving? Not really. How many "do-it-your-selfers" panicked and sold at the bottom in late 2008 or early 2009 only to see the market take off on them? There are many people who do an excellent job of managing their own investments. However a qualified adviser can add a degree of knowledge and perspective that might benefit many investors.

Sorry to disappoint, but investing is not sexy or trendy. It takes persistence, monitoring, and commitment. This isn't to say that your strategy and approach shouldn't change over time, but rather that these changes should be the result of evaluating your situation and needs. Changes should not be based on the words of the last guest on a financial news show.

Roger Wohlner, CFP®, is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill. where he provides advice to individual clients, retirement plan sponsors, foundations, and endowments. He recently cofounded Retirement Fiduciary Advisors to provide direct investment and retirement planning advice to 401(k) plan participants. Follow Roger on Twitter and LinkedIn.