Started in 1970 by Senator Gaylord Nelson, Earth Day, on April 22, is designed to create awareness of the Earth’s environment and to encourage conservation efforts.
If you and your family participate in the day’s events, such as helping clean up a local park or taking materials to a recycling center, you know the benefits of doing your part to improve. But are you doing everything you can to upgrade your environment for investing?
Actually, as an investor, you can learn a lot from the lessons of Earth Day. Here are just a few ideas:
• Diversify. If you’re familiar with Earth Day, you know that it involves multiple activities, including educational programs and do-it-now action steps. This variety is necessary because protecting our environment is a complex challenge. Meeting your short- and long-term investment goals can be challenging, too, but you’ll have a better chance of success by diversifying your investment dollars across a range of vehicles. Diversification can help reduce the impact of volatility on your portfolio.
• Seek growth opportunities. Some people plant trees on Earth Day, hoping to watch them grow over the years. As an investor, you, too, need to plant “seeds” in the hopes of growth in the future. That means that when you purchase growth-oriented investments for the long term, you need to try to stick with them and not “uproot” them after short-term declines in price.
• Develop good habits. To invest successfully, it’s important to develop good habits, such as staying invested in all types of markets, seeking tax-advantaged investments and reviewing your portfolio regularly.
• Avoid “toxins.” When you invest, you may also want to avoid “toxins” — or at least “toxic” behaviors, such as chasing after “hot” stocks that are inappropriate for your needs or trading so frequently that you run up big fees, commissions and taxes.
• Think long term. Above all else, Earth Day is a reminder that we all want to leave a healthy planet to future generations. When you invest, you also need to focus on the future. That means following a long-term investment strategy and not getting sidetracked by short-term events, such as political crises and economic downturns.
Earth Day comes once a year, but its lessons can have a lasting impact on our environment. When you apply these same lessons to your own investment environment, you may achieve healthy results.
Ross Hage is a financial advisor with Edward Jones. For more information, call (928) 468-2281. This article was written by Edward Jones for use by your local Edward Jones financial advisor.