be the sexiest investment style, but it delivers. In the last 10 years, more than half of actively-managed funds have lagged the S&P 500. The reason is fairly intuitive: If managers are siphoning off a percentage for their own work, then the majority will necessarily underperform the market.
Another way to simplify: So-called “target date” funds, which are geared toward a projected retirement. They not only give investors a diverse blend of investments in a single fund but automatically shift your investments into safer holdings as you age. So instead of fretting over the relative performance of 10 or 20 different investments, you can do one-stop shopping in a single fund.
10. Call in the Cavalry
Time to face up to your limitations: You can’t be expected to follow the market as closely as a wealth manager, whose job it is to make you money. So consider delegating, and let a financial adviser do the heavy lifting. Find an accredited professional on the Website of the Financial Planning Association, www.fpanet.org. Or if you’re concerned about paying commissions, you can opt for a fee-only planner. You can look for such a planner on the Website of The National Association of Personal Financial Advisors, www.napfa.org.
An adviser can design a road map to get you where you want to be. It was only sitting down with their financial planner that lit a fire under Cover and Bernard. “Our planner calculated how much we would have in 20 years if we did increase our saving, and how much if we didn’t,” remembers Cover. “The difference was more than $300,000. It was shocking.”