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What to Do After an Investment Setback

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Warren Buffett, one of the world’s most successful investors, has two simple rules of investing:

  1. Never lose your principal.
  2. See rule number 1.

Unfortunately, during the recent economic downturn, many people have lost some if not most of the principal in their retirement accounts. As a result, either they have to delay their retirement plans and keep working, or they have to find a way to quickly recoup the funds they’ve lost.

But regaining the lost principal takes more work and higher returns than people realize. Here’s a quick riddle that illustrates this point: Do you know when 30 plus … Read the rest

Keep Your Retirement Funds Safe by Avoiding the Stock Market Mistake

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Relying on the stock market as your retirement investment tool of choice is like using Las Vegas as your financial advisor. Unfortunately, many people have retirement portfolios that are heavily invested in mutual funds and other stock market items. Even worse, the average American doesn’t realize how weighted in stocks their retirement portfolios are, and then they wonder why their retirement accounts fluctuate so drastically.

First, here are a few facts about the stock market and its performance over the years. In 1999, Congress was under pressure to invest Social Security funds in the stock market because of the extreme … Read the rest