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Web Extra: Spring Portfolio Cleaning

Friday, 20 Mar 2009 | 3:29 PM ET
OTM Web Extra
Find out Ric Edelmanâ??s strategies for investing in a bear market with CNBC's Carmen Wong Ulrich.

It’s the first day of spring, believe it or not, so what better time to do a little portfolio cleansing? Here’s how you can position your investments to withstand the pressures of more tough times ahead.

1.Focus on the long-term, says Ric Edelman, author of the newly-released book Rescue Your Money. News is traveling as fast and furious as ever, affecting the markets and your investments on a daily, even hourly, basis. But don’t focus on the now. “Now is already a moment ago,” says Edelman. Position your portfolio for 10-20 years in the future so that the daily gyrations in the market aren’t keeping you up at night.

2. Diversify. It’s been a watchword of OTM since the show began, but it’s as important now as ever. Put your money everywhere, Edelman says - 12 eggs in 12 baskets. Use ETFs and institutional mutual funds to spread your risk. It’s simply, affordable and provides you with market-based returns over the years to come.

3. Rebalance. When you own different asset classes – as you should – they will fluctuate. It’s important to get into a habit of selling assets that have momentarily peaked and buy them when they’re momentarily down. This buy low, sell high strategy is “how you get rich over long periods,” says Edelman.


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