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Worry-Free Investing

I find it telling that Leo from Zenhabits was able to gain tens of thousands of subscribers to his blog in less than a year. Yes, Leo is an excellent writer. But I suspect that a large part of his success was the result of him tapping into an already-existing, unsatisfied desire for a simpler way of living.

Whatever the cause, people in our society are stressed out. And as you can imagine, the economic turmoil of the last several months has only made things worse.

It doesn’t have to be that way.

Thankfully, investing doesn’t have to be stressful. How do I know this? My own IRA is down roughly 40%, and I’m approximately as concerned about that fact as I am about how well the San Diego Padres will do this year. (Hint: I’m not from San Diego, and I don’t follow baseball.)

Now, I’m not sharing this as some sort of boastful display of confidence (or stupidity, depending upon your perspective). I’m sharing it in the hopes that some of you who are worried about your money right now will realize that you don’t have to be.

It’s simply your choice.

Just stop worrying.

If you’re following a strategy that makes logical sense, and that has proven historically to be successful time and again, what reason is there to worry? I have yet to see anything in the news that makes me doubt the long-term wisdom of owning a diversified portfolio of profitable businesses.

And for those of us with more than 10 years or so to go until retirement, a big decline in stock prices isn’t a bad thing at all. If anything–given that we’re still buying–lower prices are good.

Want a step-by-step strategy for worry-free investing?

  1. Choose a few low-cost mutual funds, and start dollar-cost-averaging into them.
  2. Stop paying attention to news about the stock market.
  3. Adjust your asset allocation (slightly) toward debt investments as you near the time at which you expect to start selling your investments to raise cash for paying the bills.

That’s it.

Added bonus: Not only is it worry free and easy, it’s also more likely to prove successful than just about any other investment strategy out there.

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