http://www.theskilledinvestor.com/modules/smartsection/ Personal Finance, Investment Management, and Financial Planning -- What Works and What Does Not Work Sat, 05 Jul 2008 15:07:41 -0500 http://backend.userland.com/rss/ SmartSection Financial Articles > Financial Planning -- 10 Personal Steps in the Right Direction webmaster@theskilledinvestor.com webmaster@theskilledinvestor.com en http://www.theskilledinvestor.com/images/logo.gif http://www.theskilledinvestor.com/modules/smartsection/ 140 70 http://www.theskilledinvestor.com/ss.item.82/step10-choose-objective-and-competent-investment-advisers.html Pick investment advisers solely to obtain objective and high quality advice. Specific investment advice is potentially of high quality, if it is carefully customized to your particular needs and is given by an adviser who is independent, knowledgeable, and competent. If you agree with the advice being given, then buy the recommended securities through the most inexpensive channel possible. Tue, 09 Aug 2005 14:10:00 -0500 http://www.theskilledinvestor.com/ss.item.82/step10-choose-objective-and-competent-investment-advisers.html http://www.theskilledinvestor.com/ss.item.81/step-9-monitor-and-adjust-your-financial-plan-time-efficiently.html Time in life is the most precious and perishable asset that a person has. It should be spent enjoyably and efficiently. Scientific investment strategies that rely on relatively efficient financial markets allow people to minimize their time commitment to investment management. Yet, on average, they are still expected to obtain optimal risk-adjusted portfolio returns that are near the market’s return Tue, 09 Aug 2005 14:00:00 -0500 http://www.theskilledinvestor.com/ss.item.81/step-9-monitor-and-adjust-your-financial-plan-time-efficiently.html http://www.theskilledinvestor.com/ss.item.80/step-8-insure-against-financial-risks-economically.html While value, affordability, risk exposure, and risk tolerance should affect insurance purchase decisions, insurance is often sold and purchased emotionally. Yet, insurance premium payments reduce personal funds that might otherwise be available for additional investments. Many people could spend all their net savings on insurance premiums and have nothing left to invest and to build an investment portfolio. The issue is where to set a rational rather than emotional balance between expected risk and return. Tue, 09 Aug 2005 12:50:00 -0500 http://www.theskilledinvestor.com/ss.item.80/step-8-insure-against-financial-risks-economically.html http://www.theskilledinvestor.com/ss.item.72/overview-ten-steps-to-sensible-and-efficient-investment-planning.html The Skilled Investor provides this ten-step process to help investors optimize their financial and investment affairs and reduce the unnecessary waste of their money and their time. Tue, 09 Aug 2005 12:40:00 -0500 http://www.theskilledinvestor.com/ss.item.72/overview-ten-steps-to-sensible-and-efficient-investment-planning.html http://www.theskilledinvestor.com/ss.item.79/step-7-reduce-investment-expenses-and-control-investment-taxation.html Even with optimal investment strategies, there is still substantial room to improve upon net investment performance through continued and vigilant focus on controlling investment costs and tax realization. The fees extracted by the financial securities industry increased substantially during the last two decades of the 20th century on both a total and a percentage of returns basis. At the same time industry deregulation, market innovation, and increased competition provided many new and useful mechanisms for investors to manage their assets in a much more cost- and tax-efficient manner. Sun, 24 Jul 2005 21:20:00 -0500 http://www.theskilledinvestor.com/ss.item.79/step-7-reduce-investment-expenses-and-control-investment-taxation.html http://www.theskilledinvestor.com/ss.item.78/step-6-select-financial-investments-rationally.html Given the extremely large number and variety of available securities, investors need a rational basis to select among them. Without rational selection criteria and a good understanding of which factors are more or less likely to increase risk-adjusted returns, investors will make decisions based on false assumptions. Sun, 24 Jul 2005 19:30:00 -0500 http://www.theskilledinvestor.com/ss.item.78/step-6-select-financial-investments-rationally.html http://www.theskilledinvestor.com/ss.item.77/step-5-allocate-financial-investments-across-the-primary-investment-asset-classes.html Appropriately setting your personal asset allocation in line with your personal risk tolerance is a critical decision for every investor. Because the average risk-averse investor holds the average portfolio asset allocation, this becomes the starting point in determining how a specific individual’s portfolio might diverge from that average allocation. Sun, 24 Jul 2005 18:10:00 -0500 http://www.theskilledinvestor.com/ss.item.77/step-5-allocate-financial-investments-across-the-primary-investment-asset-classes.html http://www.theskilledinvestor.com/ss.item.76/step-4-diversify-fully-within-financial-investment-asset-classes.html Diversification is genuinely an investment “free lunch,” and it is a key contributor to improved investment risk management. Diversification has become an axiom of personal investing, because the specific risks of businesses and other investment entities can be reduced or eliminated from a portfolio without reducing expected returns. Sun, 24 Jul 2005 17:50:00 -0500 http://www.theskilledinvestor.com/ss.item.76/step-4-diversify-fully-within-financial-investment-asset-classes.html http://www.theskilledinvestor.com/ss.item.75/step-3-assess-your-personal-investment-return-and-risk-tolerance-preferences.html Differences in risk tolerances mean that more risk-averse investors are personally more satisfied with a lower risk portfolio despite its lower expected returns. Less risk-averse investors are more satisfied with portfolios characterized by higher risk and higher expected returns. Investors with different levels of risk tolerance are more satisfied by the expectations associated with investment strategies that are better aligned with their risk preferences. Sun, 24 Jul 2005 17:30:00 -0500 http://www.theskilledinvestor.com/ss.item.75/step-3-assess-your-personal-investment-return-and-risk-tolerance-preferences.html http://www.theskilledinvestor.com/ss.item.74/step-2-set-your-personal-savings-earned-income-and-other-financial-goals.html The single most significant financial lever that individuals control directly is their management of personal expenditures. The second is their lifetime effort to obtain sufficient income. Most people simply do not save enough of their current income to fund their future needs. Sun, 24 Jul 2005 17:10:00 -0500 http://www.theskilledinvestor.com/ss.item.74/step-2-set-your-personal-savings-earned-income-and-other-financial-goals.html