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What should you invest in?

By Victoria Collins, Ph.D., CFP

You’ve heard it before – the old adage “Sell in May and stay away.” There are years it seems like good advice, especially those when the market tanks in June. But don’t be fooled. The best advice is to invest in a number of asset classes that zig and zag differently with market and economic conditions. If you have a diversified portfolio geared to your goals and risk comfort level, you’re less likely to act on old adages or your emotions.

Let’s go one step further than that diversified portfolio. There are three investments, I’ll bet you don’t even think about that can easily be worth more to you than the gains in your portfolio.

Where you live

Homes are the largest nonfinancial asset for most people and location is the key determinant of the home’s value over time. You can influence your home’s value not only by maintaining and remodeling it but by getting involved in making your community the best it can be. Work with your association to get potholes fixed, trees trimmed, greenery and flowers planted. You get the idea.

Your retirement funds

You’d be surprised at how valuable a 401(k) is, especially if you contribute the maximum and your employer matches a percentage of that. Tax deferred savings are powerful, so take full advantage of your 401(K) or any retirement plan you have. We don’t often think of Social Security as an investment, but it’s like a lifetime of annuity payments. Some couples enjoy an income equivalent to what would be generated by a $1 million portfolio.

Your body

According to a 2012 study published in the Journal of Labor Research, workers who exercise regularly earn 9% higher pay on average than those who don’t. There are also studies that have documented an obesity penalty to earnings, which seems to hit women hardest. Beyond earnings, there are other financial benefits. Life insurance and health care both cost less for women who are fit. If you’re working, chances are you’ll have fewer sick days and higher productivity. Think about it, the gains from being fit over time will most likely be worth more than the gains from your portfolio.

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