No Luck Investing

Ray’s Take: A rabbit’s foot on a string. A silver dollar. A four-leaf clover. A lucky penny. These are all lyrics from a 1961 song by our very own Memphis legend, Elvis Presley, titled “Good Luck Charm.”


But the truth is, when it comes to successful investing, it isn’t about good luck or any luck at all. Creating a successful investment plan requires a sound strategy, time, research and, in most cases, guidance from a financial services professional. Investing is not a one-time event.


The key to making wise investment choices starts with matching risk and allocation with your time horizon. For example, if you are 45 and want to retire at age 65, you have 20 years to get there. How much money will you need when that time comes? If the risk required is too high, reduce the goal or extend the working period.


You also need to learn the market and select an investment path. If you are new to investing, start small. A sudden swoon or spike is always possible. It’s not “bad luck” or investment genius. But it can imprint on you for the rest of your investing life.


Always diversify and review performance, but not too often. Quarterly at most. Watch your investments and learn what’s working and what isn’t. If you have more time, risk is your friend. If you have less time, don’t tempt fate. Most asset classes will regress to their mean. Your own greed and fear are your enemies.


Be careful not to get sucked into the latest market craze or seek short-term profits that may be short-lived. Committing to a long-term investment strategy is best.


Warren Buffet, one of the most successful investors ever, once said, “If I cannot understand it, I won’t invest in it.” This may seem simple, but it is sound and effective investment advice.


In the end, making wise investment choices isn’t about luck. And I think even Elvis would agree with me on that.


Dana’s Take: Can luck apply to money or just to love? I was lucky in love when I met Ray, but with money? Not so much. Now that I’ve seen how a financial planner handles money, I realize that it’s more about good habits and financial realities, than luck.


When I was single, I lived in financial denial. I paid all my bills and didn’t run up credit cards, but I wasn’t accumulating for my financial future. Even saving 10 percent of my earnings would have been a good start.


Visit your company’s human resources department and make sure you’re maximizing savings plans and any company matching. Also, visit with a financial planner to plan for a wedding, children, college or retirement. Odds are your financial “luck” will improve.

Smart Travel Planning
Trust Funds 101