There are 5 important factors to increasing the value of a portfolio. These 5 factors affect the value of your portfolio more than any other factors and should be a part on your investment planning:
1. Years of Compound Growth
Exponential or compound growth is THE most powerful investment principal. Start your investment program early! Starting at age 25, a $300 monthly investment earning 8% will build a 1 million dollar portfolio at age 65. Starting at age 45 will require a $1700 monthly investment for the same outcome.
2. The Amount of Money Saved
Pay Yourself First with an Automatic Investment Plan. Get your household budget in order. Save. Save. Save!
3. Asset Allocation
Studies show your asset allocation plan (how you divide your portfolio assets) is the most important determinate of your investment returns. If you need help with this aspect of investing, hire a company such as the Arbor Investment Planner.
4. Portfolio Returns
The miracle of exponential growth and the concept of double time is affected by the length of time and the investment returns you achieve. It’s important to balance the need for high returns with the risk of large losses. That is why it is crucial to have a risk management plan.
5. Minimize Taxes
Keep investment taxes low. There are ways to minimize investment taxes. The more money you keep, the more money you have to compound its’ growth tax-deferred, for many years.
Do you have any other important factors you would like to add?
Related Reading: Investment Planning Strategies
| AAAMP Blog by Ken Faulkenberry | |
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Ken Faulkenberry earned an MBA from the University of Southern California (USC) Marshall School of Business with an emphasis in investments. Ken has 25 years of investment experience and is dedicated to helping people with self-directed investment management through the Arbor Investment Planner. His asset allocation strategies have an outstanding performance record. |
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