Charles Schwab  Charles R. Schwab is founder, Chairman of the Board and Co-Chief Executive Officer of The Charles Schwab Corporation. Mr. Schwab started his San Francisco based firm in 1971 as a traditional brokerage company and in 1974 became a pioneer in the discount brokerage business. Today, the firm is one of the nation's largest financial services firms, serving 7.7 million active investors with $858 billion in client assets. Books You're Fifty-Now What? Investing for the Second Half of Your Life , Crown Business, 2001 Charles Schwab's Guide to Financial Independence , Crown Business, 1998 How to Be Your Own Stockbroker , MacMillan, 1985 Schwab principles for long- term investing -
Start with the basics for long-term investing. Begin by setting aside in cash at least two to six months' living expenses - an emergency fund that will be available in the event of illness or a period of unemployment. Then take advantage of employer-sponsored retirement plans and IRAs by contributing the maximum amount allowed. Finally, commit yourself to regular investing now so that you and your family will have enough later. -
Get started now. Every year you put off investing makes accomplishing your ultimate retirement goals even more difficult. As a rule of thumb, for every five years you wait, you may need to double your monthly investing amount to achieve the same retirement income. Social Security and pension plans alone are not enough for a comfortable retirement. -
Know yourself. Understand yourself as an investor: your emotions, your fears, and your tolerance for risk. Make sure you choose investments that you're comfortable with and that are appropriate for your long term goals. For some investors, particularly those with large or complex portfolios who want ongoing investment management, the services of a fee-compensated financial advisor may be appropriate. -
Invest for growth. Invest in stocks, either individually or in mutual funds, for long-term growth. In any given year, stocks can be more volatile than other investments, but over time, stocks have typically outperformed all other types of investments while staying ahead of inflation. Stocks should be the core of a long-term investing strategy. -
Take a long-term view. Patience is a virtue. Maintain the discipline to hold onto or add to appropriate investments through down markets as well as up markets. -
Build a diversified portfolio. In deciding how to allocate your assets, be sure to diversify, both among asset classes (stocks, bonds , and cash equivalents), and within each class. Choose an appropriate asset allocation model. Doing so can spread risk over a variety of investments and may provide more consistent and reliable outcomes . For many investors, broad-based index funds are an excellent investment strategy. Index funds are a sound, low-cost choice for a core holding designed to track the market's performance. -
Consider bonds and cash for diversification and income. Bonds and cash can play an important role in an investor's portfolio, providing solutions for income and diversification needs. But to achieve your long-term growth objectives, look to stocks and stock mutual funds. -
Minimize your expenses. Over the long run, sales charges, loads, and high expenses can drag down the performance of even a well-diversified portfolio. Reduce your investment expenses by using no-load funds, low-cost stock and bond trading services, and tax-efficient mutual funds. For many investors, a buy-and-hold strategy can minimize the impact of capital gains taxes. -
Stay on track. Review your portfolio at least once a year, and certainly whenever personal circumstances change. You'll need to evaluate the performance of your investments against relevant risk-adjusted benchmarks, and, when necessary, to rebalance your portfolio to stay on track with your long-term financial goals. -
Become a lifelong investor. Investing for growth shouldn't stop when you retire. To make your money work for you throughout your retirement years, keep investing a portion of your portfolio for growth. Don't automatically shift all of your money into fixed-income and money market investments too early. www.schwab.com 'Most of the time the market rises. Unless it is a real bear market, all attempts at market timing backfire and become very costly. But when you actually encounter a real bear market, recognizing it and taking corrective actions is near life saving.' ”Ken Fisher | |
