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Many people believe timing is everything in investing. They hope to get lucky with hot stock tips, but savvy investors make their own luck, says financial advisor Julie Murphy Casserly.
"You can position yourself to be lucky by diversifying your assets and making sure that your money is set up to do what you want it to do for you," says Casserly, president of JMC Wealth Management.
Your investing strategy differs depending on where you are in your life, so adjusting your asset allocation to meet your current needs is crucial.
With three simple steps, you can position yourself to be lucky and make sure your money is performing for you:

  -- Diversify. Research shows that 92 percent of growth is based on
     diversification and only 1.8 percent comes from buying the right asset
     at the right time.

     "No one who has wealth ever had 100 percent of their money in stocks,"
     Casserly says.  A portfolio should include a mix of other investment
     vehicles, such as bonds and real estate.  The makeup of your portfolio
     should fit how you want your money to perform and how much risk you are
     willing to take.

  -- Rebalance. Because riskier investments carry the potential for greater
     returns, they often outperform pieces of your portfolio that provide
     more predictable, but smaller, returns. Investments that earn more over
     time will take up a larger portion of your portfolio.

     To account for this uneven growth, examine your portfolio regularly and
     reallocate assets to fit your ideal balance.  Casserly suggests
     rebalancing at least once a quarter or choosing a fund, like those
     available from Fidelity or American Funds, that will automatically
     rebalance for you.

  -- Reconsider. A 10 percent loss in one asset class may not mean the same
     thing to you that it once did. Even though the proportions are the
     same, losing 10 percent on a $1,000 investment is not nearly as
     frightening as losing the same percentage on a $100,000 investment. So
     as your assets grow, take another look at the allocation that worked
     for you when you didn't have as much at stake.

     "When you throw in a couple more zeros, it's a whole new ballgame,"
     Casserly says. "You need to make sure that your investments align with
     your true risk tolerance."

Julie Murphy Casserly is a financial advisor and president of JMC Wealth Management, a Chicago-based financial services firm that helps clients realize their goals by examining the emotions behind their money. Visit http://www.jmcwealth.com/ for more information.
Source: JMC Wealth Management