4 Tips for Removing Emotions from Investing for Maximus Employees

Here are some of the best tips for Maximus employees for removing emotions from their investing strategy:

1. Establish Long-Term Financial Goals

It's important that Maximus employees and retirees have a financial goal in mind. Knowing your financial goals, risk tolerance, time horizon, etc. can help you establish a long-term plan for investing. It is easy to get distracted by short-term losses when focused on short-term gains, but if you have set rules and a longer time horizon, it can be helpful to stay calm during times of high market volatility

'Holding sufficient cash can reduce big emotional swings that come with being over-invested in the stock market.'

2. Use Cash as a Position

Holding sufficient cash can reduce the big emotional swings that come with being over-invested in the stock market. Warren Buffett has advocated using a 90/10 equity-to-cash ratio, but a good rule of thumb we suggest to Maximus employees and retirees, is to have enough cash to cover 12 months of expenses.

3. Diversify

We suggest that Maximus employees and retirees diversify their portfolios. By diversifying your portfolio across multiple asset classes and sectors, you can reduce wild swings and extreme market risks. Having a portfolio that’s balanced and diversified in many areas can inadvertently prevent you from making rash decisions.

4. Dollar-cost average

This strategy involves investing equal dollar amounts at a regular, predetermined interval. During a downtrend, investors are purchasing shares at cheaper prices. During an uptrend, previously held shares are earning capital gains and fewer “expensive” shares are being bought. DCA can possibly lower the total average cost per share of the investment.