You’re determined to build an impressive portfolio. To achieve that end, you scrimp and save, all in the interests of setting aside money. Unfortunately, your efforts could be for naught if you fail to adopt a viable long-term plan. One of the chief areas of concern: your portfolio’s return on investment. It’s easy to coast along without worrying about whether you’re getting the ROI you deserve, but sometimes, it’s best to step back and take a broader outlook. Read on to learn about ideal ROI and how personal financial consulting can help you achieve it.
What Is an Ideal ROI?
Experts disagree as to what constitutes a desirable return on investment. Many view the S&P 500 as a rule of thumb; in their opinion, you’re in good shape if you draw even with or come out slightly ahead of the prominent stock market index.
Others believe that focusing excessively on current ROI is asking for trouble. The goal, after all, is a viable long-term strategy. In some cases, this may mean seemingly modest gains in the present, especially compared to flash-in-the-pan opportunities. While it’s possible to forecast long-term stock market trends, it’s tough to determine what will happen in any given year.
Unfortunately, no one can outline an “ideal” ROI. An investment strategy that pays dividends in one situation could prove disastrous for the next person. Ultimately, the most effective strategy is personalized and guided by a professional with a strong history in wealth management.
How to Improve Your ROI
The first key in improving your portfolio’s returns: working with the right financial consultant. Going it alone is never advisable; even if you follow the stock market closely, you do not have the expertise necessary to make informed decisions that will ensure long-term viability. Ideally, your consultant will help you diversify your funds so that you weather downturns with ease. Your portfolio should reflect your personal risk tolerance; are you willing to shoot for higher returns if such a strategy is accompanied by higher risk? Also key: avoiding regular and speculative trading. Ample research indicates that the more often investors trade, the worse they fare. In the stock market, as in Aesop’s Fables, slow and steady wins the race.
Not sure how to proceed with your portfolio? No worries; with Larry Turner, CPA, in your corner, you have nothing to fear. Get in touch today to learn more about building wealth and cultivating an effective strategy for your portfolio.