One of the biggest mistakes parents make today when trying to instill financial literacy into their children is trying to run before their kids can crawl.
Understanding the time horizon might be the most significant factor in determining how you will ultimately structure your portfolio.
It’s is typically an excellent time to get a top-down understanding of the many investment products that one will use, in a diversified fashion, to meet their future savings goals.
It has been said that the single biggest determinant of investor returns comes from asset allocation, otherwise known as diversification.
These days, a never-ending list of choices exists in the financial marketplace. And picking stocks, bonds, mutual funds, ETFs or money managers to execute each part of your well-diversified portfolio is not easy to do.
There is a balance between looking at your portfolio too much versus not enough. Just because you set an asset allocation doesn’t mean you never tweak it. It’s important to monitor things from time to time and rebalance every so often.