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Assets in passive equity strategies grew to nearly 45 percent of all stock market investments in the U.S., and active equity managers continue to lose ground due to the over $470 billion investors have invested in passive equity strategies like index funds.

There is good reason why index investing has an eager and growing participation. It is much cheaper than active management. But, are index funds better for your financial goals? The answer is yes, but with a footnote.

For anyone that has listened to our show for some time, you know that we are huge proponents of index investing. There are a lot of reasons to like index funds, but what is the difference between index investing and active management? And how can you use index funds to reach your financial aspirations? That’s what we cover in today’s episode of The Money Guy Show.

Here is what we cover in today’s episode:

• The data: How the cost and performance of index investing compares to active management
• What makes index investing so successful for investors
• How to understand expense ratio costs and the average price for both types of investments
• Why index funds are tax-efficient and what that looks like in real-life for investors who invest in them
• How to implement index funds into your investment strategy
• Why investors can consider Target Retirement Funds with a planned glide path
• At what point investors should consider something other than Target Retirement Funds
• When active management may make sense

Resources Mentioned in this Episode & Related Episodes

• Passive Investing Rises Still Higher, Morningstar Says (Institutional Investor)
• Trends in the Expenses and Fees of Funds, 2017 (ICI Research)
• Examples of Expense Ratio Costs
  • #19 = Fidelity Contrafund (FCNTX) – expense ratio of .74%
  • #21 = American Funds Growth Fund of America (AGTHX) – expense ratio of .62%
  • #1 is Vanguard 500 Index Admiral Share VFIAX – expense ratio of .04%
• Financial Order of Operations: How to Prioritize Your Financial Goals (Money Guy Show)
• Zero-Fee Index Funds! Here’s What It Means for Your Wallet (Money Guy Show)
• Index Funds 101: How to Pick ‘Em (Money Guy Show)

Enjoy the Show?

• Make sure you subscribe so you get updates, announcements, and exclusive post-show deliverables!
• Leave us a review on iTunes
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  • You can also use #AskTheMoneyGuy on social media!
• Get your FREE copy of The 30-Minute(ish) Financial Plan

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll never miss special announcements and offers, plus you’ll get future podcasts and blog posts delivered straight to your inbox so you can get in on the action right away.

So much is made about this tool of asset management, but how much does the average investor actually know?

As a brief overview, rebalancing is getting your investment allocation to the appropriate target.  For example, if your portfolio is comprised of 60% in risk assets (i.e. stocks) and 40% in conservative assets (i.e. bonds) and one piece of that moves differently and throws the balance off, rebalancing helps to get you back to your original allocation.

In the simplest form, rebalancing buys the assets that have gone below the allocation threshold you would like to be at and sells the assets that have gone over. And you rebalance so that you can maintain the appropriate level of risk in your portfolio and to help stay on track to reach long-term financial goals.

But what does the research say about rebalancing? And what is the common sense approach when it comes to this tool? Tune in to this week’s episode to hear us dive into the nuts and bolts of rebalancing and how you can use it in your financial life.

Here’s What You’ll Find Out in this Episode:

• The side-effects of rebalancing that investors should be aware of
  • It can be expensive (cost and taxes)
  • The time and labor involved
• How much value is added to a portfolio from rebalancing according to Vanguard
• The industry standard for rebalancing (hint: there is no standard anymore!)
  • Our philosophy is that a proper allocation need to encompass all aspects of your financial plan: risk profile, goals, age, and unique situations or needs.
• A brief discussion about the term “catawampus”.
• Academically, the 3 benefits of rebalancing:
  • 1. Naturally creates a mechanism by which you buy low and sell high
  • 2. Generally speaking, rebalancing allows you to keep your risk in check
  • 3. Allows you to tax-manage your portfolio
• The primary goals/motivation for rebalancing:
  • 1. Not to be poor: Risk-averse and don’t want to run out of money
  • 2. I want to be rich: Wants to grow
• Explore the goals-based approach to rebalancing for the young investor vs the older investor and a discussion of what this looks like in real life.
• The nitty gritty of rebalancing: when we do it and how often
  • We look at client allocations every quarter and we look to rebalance 2x a year, but that doesn’t mean we rebalance every portfolio twice a year.
  • We make sure client allocations reflect goals and if the threshold isn’t large enough, we won’t make the trade.
  • To make sure your portfolio is structured appropriately for your circumstances and the broader economic environment, we look beyond your macro-level split level of stocks and bonds, and we look inside those asset classes and may rebalance inside these spectrums.
• The value of tax diversification of your portfolio
  • Not all investment vehicles behave the same.
  • Ideal scenario is that as you are building wealth that you build up assets in three separate tax buckets (tax-deferred, tax-free, and taxable) so that you can minimize taxes now or in the future, and to provide flexibility when taking withdrawals later.

Resources Mentioned in this Episode

• A Better Way to Think About Rebalancing by Meir Statman, The Wall Street Journal
• The Next Millionaire Next Door by Sarah Stanley Fallaw, Ph.D.

Enjoy the Show?

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• Leave us a review on iTunes
• Send us your questions or share your story!
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This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll never miss special announcements and offers, plus you’ll get future podcasts and blog posts delivered straight to your inbox so you can get in on the action right away.

Financial success doesn’t happen in a day, but it can happen over time. If it seems like your money isn’t following an upward trajectory, there may be a simple reason why.

When you plant a seed and water it, you expect it to grow. No one expects a seed to become a mature plant overnight. And yet when it comes to money, it can be uncomfortable to prepare, watch, and wait for your dollar bills to mature over time.

You may find yourself wondering if your money is growing at the right pace or scratching your head when you notice some losses instead of gains. What exactly can prevent your money from growing?

There may be a simple explanation. Let’s have a look at the number one reason that prevents your money from growing.

If It’s Not the Market, It May Be Your Response to the Market

The markets are notoriously volatile. Some days they perform well, other days they take a hit, and still other days they hold steady. This is why you save your money in a well-diversified portfolio that contains a mix of investments allocated across asset classes.

[Related content: How to Approach Investing When the Markets Reach All-Time Highs]

But somewhere along the line, some investors can’t resist the urge to ‘tinker’ with their investments. When the market performs well (like it has been this year), it’s not uncommon for investors to try to capture more growth by buying up more securities. Likewise, when the markets fail to perform, investor behavior can trend toward offloading underperforming investments. In other words, buying high and selling low in direct reaction to the market. This behavior is contrary to the tried and true wisdom of Warren Buffett who advises, “Be fearful when others are greedy and greedy when others are fearful.”

[Related content: Ways to Overcome Investment Analysis Paralysis]

Growth Favors Those That Are Patient

Emotional investment decisions based on either unchecked optimism or fear are dangerous. You may not observe explosive growth in your investment portfolio day-to-day, but that doesn’t mean it isn’t advancing in the right direction.

Investor impatience that leads to impulsive investment decisions is the number one reason that prevents your money from growing. Making investment decisions based on emotion, trying to beat the market in an attempt to get rich quick, pulling your money out of an investment too soon — these are the ways that impatience can stifle the growth of your portfolio or even stop it completely. It’s natural to want to see growth happen quickly, but acting on impatient impulses can greatly impede your chances for long-term financial success.

Impatience is an all too human problem, one that often leads to negative consequences when it comes to investing. Fortunately, it’s never too late to start making smart money choices. With patience and restraint, you can facilitate the long-term growth of your investment portfolio.

The Solution to Impatience

One of the greatest drivers of investor impatience is fear, especially of vacillating markets. When people are fearful, they tend to make impulsive decisions that can do irreversible damage to their financial outlook.

          [Related content: 5 Ways to Overcome Financial Fears]

Being overly reactive to normal and anticipated market fluctuations will most likely turn a temporary problem into a permanent loss. While the markets can be quite volatile over any given period of time, it’s important to keep in mind that things will eventually regain equilibrium.

Here are some steps you can take to resist acting out of impatience:

• Seek and follow financial advice that is congruent with your needs, goals, and time horizons. Long-term financial success is based on your unique set of needs and goals. Stay the course and seek professional financial advice when the amount of your assets grows beyond the point you are comfortable managing.
• Remember that investment success is a marathon, not a sprint. Act with deliberation at all times, and aim for realistic returns that are more or less keeping with the overall growth of the market.
• Go back to the basics. Set attainable goals and make a plan to achieve them within a reasonable time frame. When circumstances actually do necessitate a change, adjust your portfolio slowly over time. Complicated investment strategies are oftentimes not the answer.
• Set it and forget it. It’s an axiomatic truth that a portfolio that’s allocated properly across asset classes and shifted over time has a very high potential for growth. Once you have your investments set, give it time to grow. If your plan includes such a portfolio, then you can be reasonably confident in its ability to grow over time.

Conclusion

To sum up, acting on impatient impulses is a self-defeating practice. While impatience and a desire for instant gratification are perfectly understandable in the world we live in today, it isn’t wise to let these emotions inform your choices with your long-term investments. Short-term market fluctuations have very little to do with long-term investment success. If you take nothing else away from this discussion, please bear a single all-important truth in mind as you go forward: your financial success is more likely to be determined by the sum total of the financial choices you make every day than by a single investment.

Quantifying just how financially successful you will be in the future may feel like an elusive detail in this exact moment. However, following smart money habits like consistently saving 20 percent of your income toward retirement, deferring gratification, and living out the concept of forced scarcity can help you on your journey toward financial success. And in many cases a financial professional can predict, with reasonable accuracy, just how much your money will grow over time when you exercise these smart money habits and follow an investment strategy based on your needs.

For most investors, you know that having a diversified portfolio is a best practice you ought to be following. But many people think they’re diversified when they’re really not.

Diversification simply means that you hold a variety of asset classes in your investment portfolio. The reason this is a good idea is so that you minimize your risk and maximize your potential for returns. Holding a mix of investment types has historically smoothed the investor’s ride and allows you to better stabilize your portfolio against sharply negative and positive market performance, i.e. volatility.

Whether you are managing your finances on your own right now or working with a financial professional, here are six signs that your money is properly diversified and you’re on the right track to reach your financial future.

1. You don’t worry about short-term performance.

When you’re properly invested with a diversified portfolio, you’re not worried about what the market does on any particular day. For you, daily, weekly, or monthly market fluctuations is just news, nothing that keeps you up at night.

2. You don’t chase trends.

Sure, it can be easy to get caught up in hunting around for the next Amazon or other big investment opportunity, but you’re not feeling the need to chase anything. Because you have a long-term investment strategy, chances are you are less concerned with finding the next “hot” opportunity and feel secure that your current investment strategy will provide for what you need.

3. You’re invested in the Big 4 asset classes.

Stocks, bonds, real estate, and cash – these are the staples that every well-diversified investment portfolio is comprised of. Just as a refresher:

• Stocks: share in the ownership of a company and its profits
• Bonds: you are loaning money to a company or government to be paid back with interest
• Real estate: you purchase property that you believe will appreciate in value over time
• Cash: Short-term, liquid investment that provides returns in the form of interest payments, such as money market funds and certificates of deposit

4. You leverage ETFs.

ETFs (Exchange Traded Funds) are effective tools in diversifying your investment portfolio, because they offer returns at a minimal cost to the investor. Just one word of caution: just because they offer some diversification does not mean that owning an ETF ensures you are well-diversified. This is because some ETFs may be concentrated in one type of asset, so you should understand the underlying assets that comprise an ETF before you invest.

5. You understand your underlying investments.

Having redundancies in your investment portfolio can leave you overconcentrated. However, it is also possible to over-diversify certain assets classes which is not a good idea either. There is usually no reason that your investment portfolio should hold several mutual funds that invest in the exact same type of investments. If you do, you are technically diversified, but you are unnecessarily duplicating efforts. If you’re not sure, there is no shame in asking a financial advisor about your investments.

6. Your asset allocation is based on your goals, age, and risk tolerance.

Most telling that your investment portfolio is properly diversified is that it isn’t based on a whim. Your investment portfolio ought to be based on your specific financial goals, your age and years till expected retirement, and your personal tolerance for risk. Given these important variables, the investments you hold will align with your needs and flex over time. When you are 20 years old, proper diversification for you will look much different than when you are 50 years old. The allocation within the major asset classes will adjust as part of your long-term investment strategy and is a hallmark sign of proper diversification.

What questions, comments or concerns do you have over the subject of diversification? The bottom line is that your investment strategy does not need to be complicated to be effective. In fact, simple can often be most effective in helping you reach your financial goals. Never hesitate to ask a financial professional any question you have about your investments. Your continued education and understanding of your personal finances will only help you continue to make smart money decisions for you and your family.

With the DOW Jones Industrial Average striving to reach 20,000 (19,933.81 as of December 23), it creates an investment environment that can easily send investors into a frenzy over what sorts of investment moves should be made. Understandably, investors don’t want to lose out on the upside of the recent market upswing, but there are a few ways to set yourself up for success so that you don’t need to make any rash money moves based on a reaction to current market trends.

It’s important to remain focused on your long-term financial goals in the midst of short-term stock market activity. While it’s tempting to react to current market conditions, take note of a couple ways to approach investing so that you are poised for long-term financial success through all market cycles.

[Related: Ways to Overcome Investment Analysis Paralysis]

Diversify, Diversify, Diversify

If we’ve said it once, we’ve said it 1,000 times: diversifying your investment portfolio is one of the wisest ways to invest for the long-term. There will always be market volatility. Sometimes the markets perform well and go up (like they are right now). And sometimes, like at the beginning of 2016, they show stagnant or poor performance. Regardless of what the stock markets do on any particular day, having a diversified portfolio means that you hold a mix of investments ranging from stocks (domestic and international), bonds, real estate, and cash. Each of these assets respond differently to market volatility and other economic events, which winds up offering you a measure of protection against losses.

The idea is to position yourself to take advantage of some upside so that your army of dollar bills can work hard to earn you more over time (stocks), while simultaneously protecting your investment portfolio from the downside (bonds). A balance investment portfolio helps to provide a more stable ride over the course of your lifetime.

Set It and Forget It

Most of us are not day traders, nor do we have the stomach for the amount of risk involved in trying to time the market to buy and sell at just the right time. As a long-term investor, you’re not looking to gamble with your future. This is why setting your investments and then forgetting about them is a smart financial decision. In more academic terms, the concept of “set and forget” is called dollar-cost averaging. This is a systematic approach to investing that automates when you buy into the market. Investors who buy at regular intervals monthly, quarterly, or semi-annually are practicing dollar-cost averaging

Dollar-cost averaging removes the emotion from your investment decisions and sets you on a path to buy into the market regardless of what the market is doing. Sometimes you’ll buy high and other times you’ll be able to buy low and your investments will average out over the course of your investment horizon. What’s even better is that you do have some flexibility with dollar cost averaging so you can make adjustments along the way. When the markets are low, you can decide to buy more shares at the time and when the markets are high you can buy less, but the point is that you are systematically set up to buy on a regular schedule so you’re never tempted to try to time the market or pull out of the market. You are able to guard yourself against making rash emotional investment decisions with dollar cost averaging, while still leaving yourself open to financial opportunities.

Final Thoughts

At the end of the day, it’s most important to stay the course, even when markets are performing at all-time highs. Avoid the knee-jerk reactions at all costs. We have a saying, “Be greedy when others are fearful and fearful when others are greedy.” When you are invested for the long-term, you can pay attention to market activity without succumbing to a fear-based or greed-based response. And if you have questions about your investment portfolio, don’t hesitate to reach out to your financial advisor and touch base. If you’re thinking about your financial future, now is a great time to revisit your financial outlook with a financial advisor and confirm you’re doing everything you should be doing to achieve financial success.

You can always reach out to us if you have a financial question or just want to get to know us better. Don’t be a stranger. Contact us directly anytime at Brian@moneyguy.com and Bo@moneyguy.com.

With the DOW fighting towards 20,000 for its longest weekly winning streak, at six, in more than a year, plenty of investors are finding themselves speculating about what comes next. Analyzing the markets and deciding what the next best money move is can be stressful and paralyzing all at the same time. To help put today’s investing environment into context, we go back several decades and look at how the markets have performed and help draw some valuable conclusions about what that means for today’s investor. We also zoom in on 2016 and walk through the wild ride we’ve had from the first 28 days to these historic final days.

This is an episode you don’t want to miss:

• What to do when the market delivers all-time highs
• A look back at 2016, where we started and how we’re ending
• Overview of how the stock market operates (with the use of entertaining and informative metaphors!)
• How fear plays a role in our investment behavior and what we have learned from it
• When to start investing and what you should know about entry years
• How to put your army of dollar bills to work over the long term
• The power of dollar cost averaging and what that looks like for you today
• When you should sell and when you should buy
• Ways to think about your investments and how to avoid costly mistakes

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll get immediate access to 15 of our most recent shows, plus you’ll get future podcasts delivered straight to your inbox so you can get in on the action right away.

How you think can often lead to how you act. When it comes to your finances this is true also. In fact, your money mindset can determine whether or not you’re successful in reaching your financial goals by how you think and approach your financial life.

Do you have a positive money mindset or a negative one? Here are three ways to find out and some tips to focus on the money mindset that will help you be most successful in your financial life.

1. Do you buy what you want immediately or defer gratification?

Let’s say you really want the latest and greatest cell phone that just hit the market. Are you someone who goes out and buys it immediately or do you think about it and plan the purchase for a later point in time? While it may not be fun to restrict or delay a purchase you really want, the act of deferring purchases so that you can align your financial resources accordingly is a hallmark of financial success. Consumption, while not inherently bad, can easily lead to overconsumption (outspending your income) that has the potential to negatively impact your financial future if you’re not careful.

Remember to pay yourself first (save for the future), cover your fixed expenses (mortgage/rent, utilities, etc.) and THEN spend what is left on wants. This may cause you to defer gratification of a purchase until next month if you’ve already spent your discretionary resources. Limiting your current wants in consideration of what’s best for your financial future is winning money mindset #1.

2. Are you energized at the thought of your future or fearful about what it will actually be like?

Positive or wishful thinking alone won’t make your vision of your financial future so. Positively thinking and envisioning your financial future can, however, help you make smart financial choices today that support your ideas for tomorrow. With a positive, “I can do this” money mindset, you’ll keep yourself motivated to set and achieve your financial goals. If you are paralyzed by negative thoughts and fear, it can result in a negative outlook that can inhibit you from taking appropriate actions towards securing your financial success. A negative internal voice can function to self-sabotage your financial potential.

If you find you tend to be a “glass is half empty” type of person, try your best to fight the tendency to be negative. Set financial goals and pragmatically tackle them one at a time. This can help you methodically work against a negative mindset and build positive outcomes over time.

[See: 5 Ways to Overcome Financial Fears]

3. Are you open to taking risks or woefully adverse?

When it comes to your long-term finances, it’s probably not the best idea to risk more than you’re able to lose without it negatively impacting your financial future. That said, carefully considering financial opportunities within the context of risk versus reward is a winning money mindset. It makes you more open-minded to financial opportunities and less susceptible to pursuing a path that doesn’t make sense for you and your financial situation.

Giving your money the opportunity to grow is why people invest in the first place. If you are so risk adverse that you won’t invest your money or only use “safe” investment vehicles like CDs and savings accounts, you are likely restricting its potential to work harder for you. There are certain financial vehicles that can offer higher rates of return historically than others. Often times, the higher the potential gains, the higher the potential risk. As an example, stocks typically offer the potential for higher rewards, but they also come with a higher risk of potential losses. Having a diversified portfolio of higher risk and lower risk investments is a smart way to take advantage of potentially advantageous investment opportunities while limiting your overall exposure to risk.

Ultimately, your money mindset can help you make financial decisions that lead to your future success or failure. Positive thinking that leads to positive financial action has a greater potential for positive outcomes.

In this episode of The Money Guy Show, Brian and Bo discuss the five biggest tips the future wealthy you would want you to know right now about building wealth. This is a truly universal topic that applies to everyone – every age and every income level.

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian [at] money-guy.com and bo [at] money-guy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll get immediate access to 15 of our most recent shows, plus you’ll get future podcasts delivered straight to your inbox so you can get in on the action right away.

If you’ve watched business news or read any financial publications lately, you’ve probably heard a lot about market volatility. Defined simply as the day-to-day stock market swings, the topic is almost single-handedly responsible for most of the panic-inducing financial headlines produced by the media.

Many investors feel anxiety at the mere mention of the word volatility because it has the potential to threaten something that they value most: their money. But even as unsettling as a steep decline in the stock market can be, there are several key takeaways that could positively affect your long-term financial health.

Here are a few lessons that you can learn from volatility in the markets.

Volatility Is Normal

As much as the media tries to make it appear that market volatility is currently at it’s worst and climbing.. it’s not!

In fact, it’s widely understood that one of the most difficult aspects of investing in the stock market is the risk/reward trade-off that is required to realize higher returns. And although high volatility can cause concern for investors because of the inherent risk involved, it is the nature of markets to have both gains and losses in the short term.

Consider the uncertainty that was present in the market at the beginning of 2016. This is just one example of the many emotional ups and downs that the stock market takes us on from time to time.

While volatility is inevitable and there’s little that can be done to prevent it, it’s important to understand the cycle and learn to react rationally in order to meet your long-term financial goals.

Recognize Your Blind Spots

Making important financial decisions can be overwhelming, and in some cases, downright terrifying. For some, it’s conscious avoidance. In others, unintentional self-sabotage.

But no matter the underlying reason, avoiding certain aspects of your finances altogether can halt your efforts to make progress with your money.

This is why it is important to recognize your financial blind spots. To risk stating the very obvious, blind spots by nature they are difficult to observe. But don’t worry, this is nothing that a little introspective reflection can’t help.

The key to success in this assessment is to be objective and search out the aspects of your financial life that you may have neglected. And although it’s easier said than done, pinpointing your blind spots is the only way you will be able to effectively move past them.

In many cases, the expert opinion of a trusted financial planner can help identify any major areas of weakness and assist in designing a strategy to fill in the gaps.

The Importance of Perseverance

Staying the course doesn’t have quite same sizzle as actively moving in and out of the market, but it is likely the best thing to do in a volatile environment. In fact, market volatility is the primary reason that many investors engage in bad financial behaviors — specifically buying high and selling low.

Keep in mind that volatility and market fluctuations are much different than a realized loss. A temporary drop in value doesn’t present a huge problem if the investor is able to persevere.

For this reason, investors with a long-term perspective rarely show concern over volatility. They understand that a permanent loss does not occur unless they cave to the emotional pressure and sell during a downturn. Simply put, don’t allow market movement to deter you from remaining steadfast in the application of your financial strategy.

Diversification Is Key

Diversifying your investment portfolio is one of the best strategies to reduce the impact of market volatility. Although diversification does not eliminate the possibility of losses in the market, it has the potential to manage your overall risk.

Because asset classes vary in performance depending on market conditions, a decline in one type of asset is typically offset by a gain in another.

Think about the most recent financial crisis of 2008. Between the early part of the downturn in 2007 through 2009, the S&P 500 lost upwards of 55%. As you can imagine, more aggressive portfolios lost far more than that while properly diversified portfolios, overall, fared slightly better.

Now this isn’t to say that investors should completely ignore all financial news in favor of a set-it-and-forget-it diversification approach. That is a far too simplistic of a route to take. Although a significant amount of the doom and gloom rhetoric from the financial media is ratings driven, turbulence in the markets should serve as a reminder to periodically review your long-term plans and make sure that they are still on track.

Remember: the only time to adjust your portfolio is when your financial goals change, not the headlines.

In the end, the market can be a harsh teacher if we overreact to every fluctuation. But if we really pay attention and stick to our strategy, there are some valuable lessons to learn.