We grow and cultivate our assets much like farmers grow and cultivate their crops. Similarly, the end goal is to produce a maximum yield. While many factors can influence the end result, there are a few things you can do to stay on track with your investments. As the farmers harvest their bounty and retire their equipment this fall, take some time to ensure your portfolio harvest will be successful when the time comes. 

The fruits of your labor won’t appear overnight

Opening an investment or retirement account shows you are invested in your future, but what does your future look like? If you’re young and just getting started, this may be hard to visualize. Depending on your current financial situation, paying off loans or credit card debt may take priority. However, don’t lose sight of your retirement.

A farmer’s plot does not magically yield towering corn stalks overnight. Growth requires patience. It’s important to contribute to your portfolio, even if it’s just in small increments, as this will be part of your supplemental income in your retirement years.

Survey the field

Before farmers plant their crops, they survey the land. They till the fields and observe soil quality to choose the best location to plant. This will also help them determine any risks the farmland may present. You can use a similar approach when choosing your investments.

Some employers offer a variety of investment options, and each option is set up to meet the needs of a variety of investors. On the other hand, you may choose to invest on your own through a brokerage firm or an online investing service.

Where you decide to invest is up to you, but there are a few key points to consider. First, use any tools available to you to review the past performance and future outlook for each investment. Most plans will have this available for any plan sponsor to view. Second, you’ll want to assess fees, also known as the expense ratio, that are associated with management of the investments. Over time, fees can eat away at your principle so know it’s important to know what you’re paying prior to investing. Lastly, align your selection with your goals. Some portfolios are based on a target retirement date, short-term goals or long-term goals. Knowing your goals prior to evaluating options will help make your choice more clear.

Stay on track, feast or famine

Risk is something farmers face on a daily basis. It’s not unheard of for severe weather, drought or famine to wipeout an entire crop. Much like Mother Nature, the market can also be volatile.

Even the most experienced investors can be thrown by a volatile market. However, that’s the nature of the beast. Watching the market too closely can lead to poor decisions based on emotions or impulses.

Every individual has their own tolerance for risk. Regardless, trust your portfolio to perform. If you’re making regular and consistent contributions, you’ll likely see success regardless of how the market behaves.

Keep an eye on your cash crop 

You often hear the term “set and forget,” which couldn’t be further from what you need to do. Your entire yield won’t disappear overnight, but having a standard schedule for monitoring your portfolio will set you up for success. If a storm is headed your way, you’ll want to make the necessary preparations and adjustments.

Create benchmarks and schedule regular check-ups on your portfolio. You can do this on your own, or with a trusted financial advisor. Building and contributing to any investment takes patience, but it’s good to refresh your knowledge and perspective a few times a year.

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