![]() Am I going to be okay? How do I know if I have the right plan? Will the investment strategy I have in place protect me from a market drop? Inflation? Deflation? Rising interest rates? Lower interest rates? We frequently get these types of questions. All of us need reassurance and proof that we are on the right track, especially when the world around us doesn’t make much sense and it is sometimes hard to see the path in front of us.
Building a strong balance sheet and being prepared for the future can be accomplished by a few smaller things done right. The key to financial success is the day-to-day habits each one of us establish with regard to our money. Regular contributions to a 401k plan, automated savings, limiting debt, establishing an emergency fund and living within our means are critically important habits. With respect to investment strategy, the key components include understanding our own timeline, gauging our individual tolerance for risk, and building a diversified low-cost portfolio that takes into consideration each person's tax situation and other investments we may own. Investing for the future is a long-term endeavor. Along the way there will be bumps in the road that none of us can control. For instance, inflation, tax code changes, changes in interest rates, and housing bubbles are headline news. Then there are long-tail events (about once a decade) that send shockwaves through the economy. Remember 2008 or 2020, anyone? If each of us can develop good habits over the long haul, stay the course with our own investment strategy, and live within our means, we are in the best possible position to build a financially secure future. Listed below are the three articles linked above. https://www.dimensional.com/us-en/insights/all-time-high-anxiety https://www.dimensional.com/us-en/insights/key-questions-for-long-term-investors https://www.dimensional.com/us-en/insights/will-inflation-hurt-stock-returns-not-necessarily
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