I am going to share a secret that I know about investing that Wall Street hates me sharing!
It is a strategy that makes you money but cuts out the profits for the middleman in the large corporate machines that are brokerage houses.
The best way to illustrate it is through the true story of my experience as a manager at Merrill Lynch. I handled customer requests and complaints as a manager and would have to reassign clients if they were unhappy with their advisor. One day I received a call from an upset client asking me to get him a "new broker to work with." I asked him why he was dissatisfied with his current advisor and he stated that the advisor was regularly calling him and asking him to sell stocks in his portfolio to rebalance. He then stated and I will never forget "I don't sell stocks, I only buy them."
The statement prompted me to ask the client for his account number so I could look at his performance. I was blown away by the incredible long-term rate of return of over 20% that surpassed any money manager I could find at the time. He simply bought blue chip stocks and held them for 20 years without touching them. Wow! That simple plan blew my mind and I knew he was the smartest guy in the room. He just did what we all should do and that is to give the right asset the right amount of time to be successful. Stocks do very well over20 year periods and you don't have to get fancy. Make sure you are not in just one sector and don't just chase the latest hot stocks like the tech stocks right now. Diversify industries and pick the leader, buy it, hold it, and count your dough 20 years later. $1000 in AAPL in 1995 is now worth $245,000 for example. If you do this nobody dips into your pockets on commissions and that is why this secret stays a secret. If everyone did this a lot of profits for the firms would disappear!
When it is time to retire give 5 years to adjust your portfolio to create cash flow from the portfolio as passive income. Once you have given the right amount of time to the growth assets to marinate and become a large pool you are ready to monetize it to pay you a pension for the rest of your life!