Adrian Mastracci, president of KCM Wealth Management says, "First, consider what you want your retirement nest egg to do for you."

Building your retirement nest egg need not be difficult. It takes five wisdoms to pave the way for your retirement accumulation.

Investing is about setting your course to achieve a specific return so those personal goals become realities. The foundation for success requires patience and clear policies.

Achieving your nest egg is an investment marathon, not a 100-yard sprint. Pace yourself, the portfolio can be built one brick at a time.

Adopting these wisdoms will accumulate your nest egg:

1. Establish reasonable goals
First, consider what you want your retirement nest egg to do for you. The portfolio is influenced by your closeness to retirement, present age, appetite for risk and investment personality.

It's also affected by your capital and saving capacity available for investment, and the rate of return required to achieve your goals such as financial independence and retirement.

2. Establish your appropriate investment mix
Studies show that investment mix decisions have the biggest impact on portfolios of any single factor. Neither stock selection, nor market timing is even close. Therefore, stay invested within your profile.

Investment mix is the combination of asset classes, such as cash, bonds, and equities. It's also about choices such as large versus small companies. Your mix of assets considers not only your goals, but also your investment horizon.

3. Strive for consistent returns
Too many investors are preoccupied with accumulating a portfolio of yesterday's winners. This is an excellent strategy on how to get burned. My advice is to stop chasing the best performing stocks and mutual funds.

A portfolio with emphasis on consistent returns will serve you better than one with emphasis on performance. Especially if it's yesterday's performance.

4. Know when to cut your losses
Making portfolio selections is not about always being right. Part of investing is about coming to grips with the prospects of being wrong. Astute portfolio managers do admit to being wrong.

What hurts portfolios the most is not incurring the losses; rather it's keeping them far too long. Be objective, know when to fold and cut your losers. Every loss starts out as a very small loss.

5. Patience is a treasure
Keep your finger off the panic button as you accumulate your nest egg. Never put tax strategies ahead of investment strategies. Factor in market drops in your investment expectations, like the aftermath of September 11, 2001. Patience with your investments is a treasure.

My experience is that investors who concentrate on these five wisdoms make better portfolio selections for their nest eggs. They are also rewarded with returns more in keeping with expectations.

Expect the investment marathon to serve up some rough patches along the way. Keep a firm grip on your strategies and stay the course. Patience rewards, your nest egg depends on it.
 

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.