Building Your Portfolio
Setting investment goals and making investment choices is just the beginning. You'll also want to learn as much as you can about how to evaluate potential investments and keep track of the progress you're making toward accumulating the money you need to reach your objectives. That doesn't necessarily require checking your account every day, but it does mean that you should keep an eye on whether the value of your portfolio is increasing from month to month and year to year. It often pays to take a long-term perspective on investing and not be too hasty to switch investments based on short-term results.
But if your investments aren't delivering the results you had anticipated over a period of time, especially if the financial markets as a whole are doing well, you should be prepared to seek alternatives.
You'll also want to keep in mind the passage of time. What you initially considered to be long-term goals can become mid-term and short-term goals very quickly. That requires rethinking how your money is invested and whether you should begin to make some changes.
In addition, while some goals are flexible and can be postponed, others have specific dates. For example, many students begin college at 17 or 18, and need money for tuition at that point, not several years in the future. Other goals are more flexible. You can often wait to buy a home or postpone retiring from your job if that extra time will make it more affordable.
Be prepared for surprises. For example, many people retire earlier than they had planned because their employer downsizes or a company closes its doors.
Since your income, monthly expenses, and lifestyle situations are likely to change over time, you should re-evaluate your finances regularly, to be sure your expense and investment plan is still meeting your needs.