While there’s no such thing as an investment magic 8 ball to help you invest your hard earned savings, there are some key rules our experts advise you to follow. We call them the four pillars of investing. Regardless of whether you’re new to investing or have had investments for a while, they’re great rules to follow.
And don’t worry; it’s not a phone-book sized manual full of complicated mumbo jumbo. That’s just not our style.
Invest Early
The earlier you invest, the better. That’s because of a little thing called compound interest.
Compound interest is when the interest your money makes earns its own interest and ultimately allows your investment to grow even faster. Regularly investing a small amount earlier adds up far better than investing a larger amount for a shorter length of time. That means if you haven’t started, start today.
There won’t be a time machine to take you back 10 years, but in 10 years from now, you’ll be happy you started when you did, even if it felt like you were a little late in the game.
Invest Often
Investing often means setting up a scheduled regular contribution— you can do this through a pre-authorized credit (PAC)—to your long term investment accounts.
Contributing regularly ensures that you always have a set amount going into your long-term investments. It’ll help you budget for your savings and take advantage of dollar cost averaging. What’s dollar cost averaging? We’re glad you asked. If your investments are in mutual funds or other market-based investments, a PAC will ensure you purchase when the market is both up and down. That’s dollar cost averaging – you don’t have to worry about paying attention to the best time to enter the market— it all averages out in the end.
Diversify
Diversification is making sure that your investments are made up of different types of assets in many different sectors of the market. As different assets and sectors of the market perform differently, a well-diversified portfolio is a lower risk portfolio than one that only holds a small number of assets or sectors.
Stay Invested
Say it with us: Stay invested. Work with a financial advisor to set up your investments and avoid making any big changes. Basically, set it and forget it. It can be hard to watch your investments go down in value, but markets will have both up and down times. If markets dip, don’t push the panic button. Time and time again, history has shown us that the best strategy is to stay invested through the highs and lows.
If you are ready to get started but want a hand, give us a shout and we’ll be happy to walk you through your options.
The stuff we have to say.
Coast CapitalSavings Federal Credit Union provides advice and service related to deposit, loan and mortgage products. Only deposits held in Canadian currency, having a term of five years or less and payable in Canada are eligible to be insured under theCanada Deposit Insurance Corporation Act. Coast Capital Wealth Management Ltd provides investment and financial planning services. Coast Capital Financial Management Ltd. provides advice and service related to segregated funds, annuities and life insurance products. Worldsource Financial Management Inc. provides advice and service relating to mutual funds. Mutual fund values change frequently and past performance may not be repeated. Commissions, trailing commissions, management fees and expenses may all be related with mutual fund investments. Important information about mutual funds is contained in the relevant fund facts and simplified prospectus. Please read the fund facts carefully before investing.
Kelly Botchar
Member Services
Kelly has 38 years of experience in the financial services industry and holds a Personal Financial Planning Designation.When she’s not at work she enjoys cycling, golf and spending time with her grandchildren.
FAQs
Bernstein sets out four key pillars that serve as the bedrock: theory, history, psychology, and business. These pillars together function like the four legs of a chair and are the guiding principles for making good investment decisions.
What are the four key principles of investment? ›
- Goals. Create clear, appropriate investment goals. An investment goal is essentially any plan investors have for their money. ...
- Balance. Keep a balanced and diversified mix of investments. ...
- Cost. Minimize costs. ...
- Discipline. Maintain perspective and long-term discipline.
To achieve financial wellness, you need to practice the four pillars of financial wellness: budgeting, saving, investing, and planning. By following these principles and practices, you can improve your financial well-being and enjoy a better quality of life.
What are the 4 pillars of wealth creation? ›
The journey to prosperity encompasses four essential pillars: Acquire, Protect, Growth, and Pass it Along. Acquiring wealth is the first crucial step. It involves setting financial goals, diligently saving, and making informed investment decisions.
What is 4 pillars concept? ›
The four pillars of OOPS are Inheritance, Polymorphism, Encapsulation and Abstraction. Object-oriented programming mainly focuses on objects which might be required to be manipulated. In OOPs, it may represent data as objects with attributes and functions.
What is the four pillars model? ›
The Four Pillar Model is an evidence-based approach commonly used to guide federal and provincial planning, and addresses substance use across four principles: Harm Reduction, Prevention Treatment, and Enforcement.
What is the 4 rule in investing? ›
The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.
What are the 4 am investing principles? ›
Recap of 4 AM investing principles: -Stay away if you don't have a strong mind & gut. Never cry - Problems must be fixable - Max 20% in entire 4 AM grp, 2-5% max of liquid NW in each 4 AM Stock 4 AMs aren't easy! Many go from 4 am to 1 AM before they reach 6 AM, if at all!
What are the 4 main investment types? ›
Bonds, stocks, mutual funds and exchange-traded funds, or ETFs, are four basic types of investment options.
What are the 4 pillars of wellbeing? ›
The Four Pillars of Wellbeing are:
- Mental wellbeing.
- Physical wellbeing.
- Financial wellbeing.
- Social wellbeing.
Four Pillars Policy – An Australian Government policy that there should be no fewer than four major banks to maintain appropriate levels of competition in the banking sector.
What are the four pillars financials? ›
Everyone has four basic components in their financial structure: assets, debts, income, and expenses. Measuring and comparing these can help you determine the state of your finances and your current net worth. You can think of them as the vital signs of your financial circ*mstances.
What is the four pillar theory? ›
The four pillars or beliefs of Theory of Constraints (TOC) Management Philosophy are Inherent simplicity, inherent harmony, the inherent goodness of people and inherent potential.
What are the 4 pillars of life? ›
Our lives are much more intertwined and deserve a bit more complexity. Instead of analyzing life as two entities (work and life), think of life consisting of four pillars. Every action one takes can be designated under each pillar. The four pillars of life are self, career, relationships, and world.
What are the four pillars of success? ›
The 4 Pillars of Success
- Hard Work. Of course! ...
- Talent. Talent is most often forged out of hard work, even if it seems to come naturally to a few at a young age. ...
- The Right Network. ...
- Good Timing and Good Luck.
What Are the Components of an Investment Policy Statement? Different investment policy statements will have different components, but generally, they seek to address the scope of the investment, the governance, the investment's rate of return and time frame, risk, risk management, and taxes.
What are the 4 pillars of the economy? ›
The four pillars of economic security – labor, benefit, protection, and equity; Each pillar's role in supporting a well-functioning economic infrastructure; and. The policy options stakeholder communities identify as their top priorities.
What are the 4 pillars of financial services? ›
The 4 pillars of a financial system
- Financial system pillar #1: Pricing.
- Financial system pillar #2: Profit.
- Financial system pillar #3: Performance.
- Financial system pillar #4: Planning.
