In the world of investing, you are subject to an endless flow of hype. At every level, from the most granular (a specific stock, annuity, fund, ETF, REIT, option straddle, etc.) to the broadest (are we on the brink of collapse, or historic opportunity?), experts will bombard you with recommendations to DO SOMETHING NEW! Overwhelmingly, they want you to stop whatever you're doing now, and follow them down a yellow brick road of endless opportunity. They will always make their advice seem irresistable, with pie charts, tables, Powerpoint slides and inspirational videos sweeping you into ... well, usually questionable actions.
The most useful advice I can give you is to remember that the interests of people who come to you unasked are vastly different from yours. Every time you follow such an expert's advice, he or she makes money. Do you? Distressingly, most people have no answer to this question. They swing one way for awhile, then head off in another direction, but ultimately don't know what's working and what isn't.
To do better, long term, you MUST keep track of your own personal results. It is utterly amazing to me that many people have no real idea of how they are doing with their investments. They might look a year-end statements from a brokerage or mutual fund, but usually don't track things more closely.
If you haven't set set up a means of monitoring your investments, both short and long term, then you should start now. If the technology is intimidating, then hire someone to do it. Mind you, hire them to track your investments, not direct them. You should still do the latter, particularly if you're interested in being a Bodacious Bond investor. If you're at all tech savvy, or willing to become so, then there are many tools to help you. Things like Quicken will hold your hand throughout the (frankly painful) setup process. I personally make do, and very well, with a spreadsheet, I use Open Office, which is free, but most folks have a version of Microsoft Excel lying around too.
What you need to do is get a comprehensive listing of what you own, when you got it, what it cost when you got it, and what it's worth now. Money in and money out is exceptionally important. If you're saving regularly (a very very good thing), then you might be building substantial net worth, but still be failing as an investor. Your tracking system should enable you to distinguish between the performance of money already invested, and new money coming in.
Where am I headed with this? Simply put, once you have a detailed tracking system in place, then you are positioned to take charge of future choices. When you bite on a new ETF promising to goose returns by buying commodities, you can see how it actually does, as compared to the glowing, back-tested projections in the brochure. Whenever you do something new, I would strongly recommend including a note as to why you did it. Look at that note regularly, and see how your reasoning has worked out over time. I guarantee this will be a sobering experience, particularly so in the world of stock investing. Even if you own a portfolio richly studded with Microsoft, Google, Facebook, IBM, EMC, etc., you will probably be bewildered by how much less well you have done than all the charts would suggest.
If you are like me, or the huge majority of individual investors, your tracking tool will help you see the vast gap between hype and reality. One key thing you might learn is that hype can come from within just as easily as without. In the grip of enthusiasm (or depression) we are all prone to doing goofy things. Your tracking tool will be relentlessly objective, even if you are not. Most likely, you will, reluctantly or not, come to the realization that a plan is necessary. If you're attracted to bonds (since you've come thing far in my blog, I'm sure you are), then the Bodacious Bond portfolio might be perfect for you. And note one thing: I won't make a dime off of you! This blog is a labor of love after all.
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