Five Keys Every Person Should Know About Investing

As a financial consultant, we are in the business not only to carry out your transaction but to provide advice and strategy for your future. In doing so, we try to impart a certain level of education upon our clients. As such, we’ve come up with the "5 Keys to Successful Investing." We believe that every investor should know the basic concepts that guide good investment strategy, so let’s get started.

1. If an investment seems too good to be true, it probably is. The first rule of investing is this: Higher investment returns are always accompanied by higher risks. I’m reminded of a local payphone scam where the investors were promised returns of 15% per year. It was a great deal for those early investors as they were able to receive their dividend checks each month. It wasn’t long before it was determined to be a Ponzi scheme1. What was especially unfortunate is that most of the investors turned out to be elderly and many lost most or all of their money (even those early investors). If it smells like a duck, walks like a duck, and quacks like a duck, it probably is a duck. Solomon once said: "A faithful man shall abound with blessings; But he that makes haste to be rich shall not be unpunished." (Proverbs 28:20).

2. Solomon also said "Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth." (Ecclesiastes 11:2). It is generally recommended that you diversify over a broad spectrum of investments (stocks, bonds, real estate, and cash). We can help you select asset classes which are appropriate for you. Ibbotson & Associates, a leader in our industry when it comes to asset allocation, has put together some great research on this subject. Strategic asset allocation can help lower your volatility, which may result in higher overall returns2. If you would like some information, please contact us.

3. Don't succumb to fear when the market is dropping and don't become greedy when prices are rising. Emotions can be the greatest enemy to your long-term investment plan. History has shown that when most investors are selling, you may have been better off buying.2 No one has figured out how to time the market and many people have spent their lives trying to figure it out. If these people who have dedicated their lives to figuring out the market cycles have yet to perfect it, chances are you won’t be able to either.

4. Always read the prospectus. Do your best to understand the risks, costs and liquidity of any investments you make. If there are sections of the prospectus you don't understand, ask your Investment Professional. The best investors are informed investors.

5. Approach investing like you would any other important goal. Get involved in the process. First, gain an understanding of your starting point. What are your resources? Your risk tolerance? Your time horizon? Your goals? Second, design an investment plan which is suited to your individual circumstances. Third, monitor your results and make adjustments, if necessary, to keep on track. We have the tools and skill to guide you through the investment planning process.

1 The "Ponzi Scheme" is named after Charles Ponzi who in 1920 perpetrated the fraud to which his name has been forever since attached.

2 Past performance is not indicative of future results. Diversification does not assure against market loss. Stocks, bonds, and real estate all have risks associated with them. Please read the prospectus before you make any investment decision.

Steve Scalici is a Certified Financial PlannerTM with Treasure Coast Financial. He is co-host of God’s Money, which can be heard on the internet at You can contact Steve at