how to manage money

I have an account – several, actually – with TD Ameritrade.  I like TD Ameritrade well enough.  The fees are reasonable for trading and they have a fairly user-friendly interface.  I manage my own money so I’m not looking for many bells and whistles.

Yet every time a trickle of money enters my account, they call.  If I make a shift in my investments, they call.  The simple fact?  I don’t need help.  I have a simple investing strategy that anyone can follow.  It’s not original to me, but it’s barely original to anyone else, either.

I split my money 40-20-20-20 between market index funds, overseas index funds, bond index funds and “other” – stocks, odd mutual funds, etc.  I rebalanced today due to the fact that I just rolled over my 401(k).  It’s not rocket science, either.  I looked at my current allocations and built a spreadsheet to tell me what I’d need to do to get back to that formula.

Is that formula the path to wealth?  Beats the hell out of me.  You know what it is, though?  It’s the investment strategy that lets me sleep at night.  It’s the investment strategy that reduces risk to the point I’m comfortable. 

I read a lot of tortuous investment information and a lot of maximize-your-gains type screeds on the internet and I always have to wonder: why?  I want investment that let me sleep at night.  Is investing 20% of my net worth in bonds going to cost me some returns in the long run?  Perhaps.  Is it going to let me sleep at night?  Maybe.  If it does, it’s priceless. 

Don’t over think investments.  Pick a strategy and stick to it.  I did, and it’s worked well enough to date.  I’m not exactly retiring to the Taj Mahal on my investments, but I’m doing well enough for a middle-class American.  Take a conservative approach to investing – a simple allocation or a similar strategy -  and I doubt you’ll go wrong.