Roy Halladay Nearly Perfect: Investors Don't Have To Be
What an exciting way to start the post-season! The Philadelphia Phillies' Roy Halladay pitched a no-hitter, his second of the season, as the Phils beat the Cincinnati Reds 4-0. Such sterling performance is simply awesome to watch, but thankfully investors need not aspire to perfection when managing their money.
Aspiring to perfection is simply a fool's errand when it comes to your portfolio. Of course there are those who attempt to "beat the index," but if most professional money managers can't beat it, why should you? Take yourself off the hook and set realistic goals for performance that match your risk tolerance. Don't know how much you can stomach? Try this risk assessment questionnaire from Vanguard.
Then set a target allocation for a diversified portfolio and make sure you rebalance on either a monthly or quarterly basis. Here's where your emotions could take over. I can just hear that little voice inside yor head saying "the stock market is at five-month highs...maybe I'll just let my stock position ride..." But the point of sticking to your periodic re-balancing plan is that you force yourself to sell winners and reinvest that money into the areas that have done badly. Quiet those little voices and plow ahead.
And remember, you don't need to be perfect or nearly-perfect to make money and reach your goals -- leave that to the Halladay's of the world!
Image By Flickr User Jeffrey Beall, CC 2.0
