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The 5 Essential Ingredients For Investing Success

By Doug Fabian
President, Fabian Investment Resources
Host, The Doug Fabian Show

This won't be Gramp's recipe for investing success -- three parts T-bills, 2 parts government bonds and a fistful of mattress cash. No... this is a short list of 21st-century wealth-builders.

1) Take Charge of Your Money. How can so many people be so passive about their investments? How can anyone work overtime for the milk, but give virtually no time to making the ice cream?

Obscenely successful investors understand that they must be active to achieve financial freedom. They may manage their money entirely or they may manage a small portion of their assets. Either way, they assume the responsibility for their own success.

This is your lawn! Get some fertilizer if you need it. Choose a professional landscaper for special projects. But hey... make certain that your greenery is green!

2) Monitor Your Portfolio. Some investors frantically check their investments 3 and 4 times a day; others passively clock in around Christmas or tax time.

In contrast, obscenely successful investors spend a few minutes each week checking the trends. Is the large-cap growth of the S&P 500 down? Is the tech-heavy Nasdaq on the verge of a new up cycle? What about the prospects for small-caps on the Russell 2000 or the value stocks in the Dow Industrials? 

It only takes a minute to check the trends weekly at FabianLive.com. It's also important to evaluate the progress of your stock funds monthly. And every quarter, you should spend about one hour ensuring that your choices are performing better than others on an alternative hit list.

3) Make Tax-Deferred Investing Your Top Priority. Far too many people regard their IRAs and 401(k)s as relatively unimportant. You can't get at the money for so long, why spend much time on it? 

Obscenely successful investors realize that real wealth requires time, compounding and tax-deferred growth. So use taxable accounts when you require liquidity and immediate spending. But aggressively allocate to your retirement plans and IRAs.

4) Ignore the Mainstream Media. The popular magazines have less insider knowledge than 16-year old cyber-hackers. Significantly less! 

Do not rely on a reporter's untrained eye to pick your stocks. Remember, staff writers have deadlines to meet and you have as much access to essential industry info as they do. (It's called the web!)

5) Fire and Hire. If you spend one minute regretting your broker or the stock funds you've been sold -- leave! 

Obscenely successful investors consistently look at whether lemon stock funds or lemon annuities are dragging down their total portfolio returns.  They also evaluate whether a particular brokerage relationship is providing value or not.

Check benchmark trends, lemon funds, even take the Maverick Investing Risk Quiz at the Mav Club link: http://www.fabianlive.com/tools/home.html

Doug Fabian is president of Fabian Premium Investment Resource and editor of the company's four subscription-based newsletter products. For more information on these services and the highly rated Fabian Plan, including how it can help you attain your goals of growth and income using today's best no-load mutual funds, visit the Fabian web site at http://www.fabian.com/.