No one knows what the market will do next. The more specific the forecast of the so-called professionals are, the faster you should forget them. Sophisticated investors focus on what they can actually control.
7 factors that will determine the future value of your portfolio:
1. The amount you save
2. The length of time you let it compound
3. Your asset allocation
4. Your investment selection
5. Your sell strategy
6. The expenses you absorb
7. The taxes you pay.
You cannot control GDP growth, inflation, interest rates, Fed policy, or what the market or individual investments do from day to day. You cannot forecast the black swan event. But you can control every one of the 7 factors above.
Save as much as you can. Let the money compound as long as you can. Choose the right Asset Allocation. Analyse your individual investments thoroughly. Have a disciplined sell strategy. Cut your investment costs down to a minimum. Minimize your taxes.
Sven Franssen