Investing Spotlight

When people make investment changes based on the daily performance of the stock market, they tend to make poor decisions - selling when a stock is down and buying when it’s doing well. That is exactly opposite from the way to make money in investments, which is to buy low and sell high.

It’s time in the market, rather than timing the market, that has paid off for most investors. Missing just a few of the stock market’s best days can have a dramatic impact on your portfolio. But it’s impossible to predict when those days will come. Instead, it’s best to invest in such a way that you don’t have to worry about the day-to-day returns. This means diversifying your portfolio - spreading your money among funds that invest in large, medium and small companies and that use different investment strategies, with some funds searching for fast-growing companies while others look for undervalued stocks that seem ready to rebound.

Then, make changes based on your investing time frame and risk tolerance, not on which stocks did well yesterday. Gradually shift to more conservative investments as you get older.

Pick the funds based on long-term performance and compare them with other funds in the same investment category. One sector may be having a tough year but could be the next big performer. History shows that diversifying your investments will reduce your portfolio’s volatility while improving the probability of meeting your long-term goals.