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August 25, 2013

When it comes to investing, keep it simple

(Continued)

Investment expenses reduce your returns and can cost hundreds of thousands of dollars over a lifetime. Have you identified your investment costs and the value you are getting for your money? Are you forfeiting too much and getting too little in return?

Taxes can also drain your investments. Different types of accounts, assets and earnings are taxed differently. Have you placed the right investments in the right accounts to improve your after-tax returns without increasing your risk?

Is your portfolio as simple as it should be? When it comes to investing, the most effective solutions are usually the most straightforward. A thoughtfully constructed portfolio requires only a small number of carefully selected, low-cost funds to provide exposure to the asset classes needed. Successful investors understand the role of each investment they own, the reason they own it, and how it improves the chances of reaching their objectives.

Before adding an investment, make sure you understand what you are buying and how it will complement your other assets to enhance your overall plan. Ask yourself: will it reduce my risk or improve my return? Keeping your investment plan simple can help you achieve your financial goals with greater ease and confidence.

John Spoto is the founder of Sentry Financial Planning in Andover and Danvers. For more information, call 978-475-2533 or visit www.sentryfinancialplanning.com.

This article is for general information purposes only and is not intended to provide specific advice on individual financial, tax, or legal matters. Please consult the appropriate professional concerning your specific situation before making any decisions.

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