This month’s Men’s Health features an article by Ben Stein. Mr. Stein offers four rules that if followed will result in a nice retirement fund.
Rule 1: Instead of trying to time the market, try to tie it.
Forget about trying to find the next Google. You’ll waste your time and money trying to beat the market. Instead, just try to do just as well as the market. If the market return is averaged at about 10%, that’s not a bad return. Invest in index funds that track the S&P 500 or even the entire
Rule 2: When you’re tempted to sell, buy.
Investing isn’t a get rich quick scheme. Think big picture when you invest. When the market is tanking, that’s the perfect time to buy because it will eventually rebound and you’ll make even more money.
Rule 3: Collect Sectors
Not only can you buy index funds that track the S&P, you can also buy fund that track different investment sectors like energy and telecommunications. The key here, says Mr. Stein, is to diversify. That way when energy tanks, you still have telecommunications buoying you up.
Rule 4: Invest in yourself (involuntarily)
Make investing automatic. Set up an automatic deposit online and then forget about it. If you invest in index funds, you won’t need to tinker with them. When it’s time to retire, you’ll be surprised by the nice little fund you accumulated.
These rules are pretty basic Ben Stein. Nothing really new, but they’re good fundamentals that if put into practice will result in a comfortable retirement.
[tags] Ben Stein, index funds, investing, saving[/tags]