- Patience – the bulk of our investment returns for retirement are generated near the end of our time spent saving for retirement, this time is known as the accumulation cycle, where we accumulate wealth for retirement. This happens because throughout our working years our investments are compounding, in other words, our money generates money, and then that money generates money, and so on. So as our retirement pie compounds the larger it gets will then allow for it to get even larger. Typically the pie is the largest near the end of our accumulation phase when we stop earning an income and we begin to withdraw from our savings to live.
- Portfolio Structure – a key foundation to successful long-term investing is to have the right investment portfolio in place. The right investment portfolio is one which gives our money exposure to thousands of companies from across the world, these are big companies we see everywhere and we use their products, services, technology, and innovations every single day, and these are small companies we’ve never heard of before and we might never come across them in our daily lives, and a bunch of companies in between, too. All of these companies make up for a globally diversified portfolio in which we invest our money and with patience see it grow as these companies grow too and share their growth and profits with us.
the right way to invest blog
Here you will find DFA's Market Summary for the 3rd quarter of 2016. This market summary report concludes with the article I sent out a few weeks ago about the Presidential elections and their impact (rather, lack thereof) on the stock market. The last line in it: “…there is a strong case for investors to rely on patience and portfolio structure, rather than trying to outguess the market, in order to pursue investment returns” touches upon the foundation of long-term retirement planning.
Michael Pensinger, CFP® is Owner and President of Pensinger Financial, Inc.
He grew up in Park Forest, Illinois and now resides in Lemont, Illinois with his wife, two children, and two dogs. Michael serves as Treasurer on the Lemont Area Chamber of Commerce Board of Directors and he volunteers for the Lemont Open Space Committee. Read More