Many people are asking for advice from friends, co-workers, family members, strangers and their financial planners about what they should do with their investments or retirement plan. Many people panicked and spent all or a large portion of their retirement money or moved their retirement money to a savings account, CD or hid it under their mattress.
Every investor has different financial goals and objectives and should work with a financial planner to assist with meeting your goals. Financial planners have expertise in how to survive the ups and downs of the stock market and can provide the best advice and if and when you should move your money. Here are 7 tips to help you invest your money in 2009.
1. Diversify. If you have all of your investment in one area, re-allocate your investments to at least 3 areas to minimize losses.
2. Review. Review your financial goals with your financial planner at least once a year to ensure you are on track to meet your goals. Also, check your statement for any errors and notify your financial planner immediately.
3. Loan. If you plan to take out a loan on your retirement plan or sell shares of stocks, consult a tax professional and your financial advisor to determine what options you have to minimize losses and taxes and ensure you will be able to continue to meet your financial goals.
4. Time. Your money cannot grow if you take it out too soon. It is the timing in the market, not the timing of the market. It takes a minimum of 5 years to see a significant return on your investment. The rule of 72 states that it takes at least 72 months for your money to double so be patient.
5. Don't panic. Don't panic and get overwhelmed by the media, fear, anxiety and nervousness of those around you. Stay calm and follow the plan you have setup with your financial planner. Don't torture yourself by checking the stock market everyday or checking your retirement account balance every week or every month. Don't let emotions cause you to make bad decisions.
6. DRIPs. To offset any losses you may have experienced you can purchase a Dividend Reinvestment Plan (DRIP) or use it as an easy way to start investing.
7. Buy now. The motto is "buy low, sell high" is truly appropriate during this recession. This is a great time to buy stocks or to invest in a mutual fund. When the market bounces back you will have achieved great gains.
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