So managing your hard-earned money wisely, how do you that? It's critical, especially in these economically uncertain times. So here with some important dos and don'ts, financial adviser, Ron Hart. So get your notepad out because you are about to get some free financial advice.
Good to see you, Ron.
Good to see you.
So let's begin with what we always hear, diversify, diversify, you know, why you shouldn't put all your eggs in one basket, what do you mean?
You can get wealthy with one stock, one a Home Depot, for example and write it all the way up. You stay wealthy by diversifying. You must diversify no more than 5 percent in one position. Do asset allocation. Most studies say, the (inaudible) studies, the main one that 90 percent of your return is derived from the fact you do asset allocation well. So it's very important.
And so -- are we talking about hundreds? If you've got some disposable income or at least you got some income that you want to grow, we're talking about hundreds of dollars, we're talking thousands of dollars, what?
The less money you have, the more you need to diversify because you can't afford to lose it. The wealthy can take a better chance with the big positions. They can take more risks with hedge funds and be more aggressive, but the average investor needs to be careful and watch pieces well.
All right, you need to be thinking long term, you say. Big picture?
HART: Be long-term greedy, we say. Take the long term view, that's the best way to do it. People -- you have to research your stocks. You have to pay attention to what you're doing. A lot of people would spend more time researching their refrigerator or computer than they will a stock purchase. So it's a very important thing to look at, know and pay attention.
So kind of become intimately involved in that company, in that stock, you want to know and perhaps if it's something that a real tangible product or service, something you're actually going to use. You like it for some reason, maybe others do, too.
  下一页