Have a plan – and Stick to it: Asset allocation, not stock-picking, is key to solid returns

This is an excellent article by Jim Gallagher.

Steve

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So your 401(k) has shrunk into a 301(k) — again — and your kid’s college fund wouldn’t cover a year in kindergarten anymore.

You’re thinking of cashing in what’s left of your investment, turning it into Krugerrands (gold is at record highs!) and burying it in the back yard.

So, how does a person avoid hair-pulling, teeth-gnashing, garment-rending gloom as a panicky stock market once again sends savings up in smoke?

Financial planners are fairly unanimous in their answer: Get an investment plan with an asset allocation — a fixed percentage pledged to stocks, to bonds, to cash.

Then marry the plan. Promise it your undying faithfulness, swearing to stick with it for better or worse.

Read more: http://www.stltoday.com/business/columns/jim-gallagher/article_151a561d-d3a5-5f77-b7ed-ab34bea0f6fb.html#ixzz1VrSsP3en

Read the complete story here