This month, I have a master list of things you do not want to do in the New Year. In this regard, I asked our management company’s E.J. Smith to put together a list of the no-no’s that he, Matt, and I had been discussing in recent months. I have reduced the master list to a “baker’s dozen.” Enjoy and benefit.
- Do not use stop-losses. Why? Because you get taken out at the market’s price (not your price), and then it’s a guess when to get back in. Instead, focus on wise words from Vanguard founder Jack Bogle: “Don’t do something. Just stand there!”
- Do not chase yield. As a group, municipal bonds had a good year in 2015. But those investors stuck with Puerto Rico’s municipal bonds are wishing they hadn’t chased those juicy yields.
- Do not buy what you don’t know. Just because you own an iPhone doesn’t make you an expert on all things Apple.
- Do not sell Vanguard GNMA.
- Do not sell gold.
- Do not draw more than 4% per year or 1% per quarter from your portfolio. Even better, make your limits 3% and 0.75%!
- Do not ask friends how their portfolio is doing. If they announced that they did well in 2015, they’re either lying or they speculated on non-dividend-payers.
- Do not write stock options. You’ll end up owning a dump truck’s worth of other people’s garbage.
- Do not forget how you performed in 2000 and 2008. Just sayin’!
- Do not let another year pass by, only to realize you’ve done nothing to improve your family’s personal security situation. Beat inertia and visit richardcyoung.com for what I’ve done to improve my family’s situation.
- Do not worry about missing out on stock market gains. Missing out on losses feels much better.
- Do not let another year go by where you neglect to teach a grandchild how to invest. They’ll never forget it.
- Do not let another year pass without consolidating your assets with our preferred custodians, Fidelity and Vanguard.
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E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at email@example.com.