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Eight Secrets to Improving Your Portfolio Returns

By , About.com Guide

9 of 9

Only Look at Market Quotations on a Quarterly Basis

Finally, this is one piece of advice that is likely to do you well if you’ve chosen to build a long-term, conservative investment portfolio based upon dollar cost averaging, low-cost ownership methods such as a dividend reinvestment program (also known as a DRIP account), and do not expect to retire or need the funds for ten years or more, the best course of action based upon historical experience may be to go on autopilot. That is, setup your investments for direct withdrawal from your checking or savings account, reinvest dividends, and focus on only buying the lowest risk, highest quality, most attractively valued stocks or index funds such as one based upon the S&P 500.

After this is done, don’t bother even pulling up the quoted market value on the Internet when you’re sitting in front of your monitor screen, bored. Your intention, in this situation, is to acquire equity in America, Inc. that you hope and expect to be worth far more in the ensuing decades. Gyrations, even on a two to three years basis, become meaningless in this scenario. Why, then, exert emotional energy of fluctuations of asset prices? Instead, every six months or year, meet with a qualified investment advisor that is well respected, has a good track record based upon conservative portfolio allocations designed to meet your individual needs and risk profile, and review your holdings. If the companies still appear sound, reasonably valued, and your outlook for cash requirements hasn’t changed, you may not need to do anything. If historical precedent over the past one hundred years remains true, you’ll end up with far more wealth than you would have by trading on your own or squirreling away assets into cash or commodities such as gold.

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