John, so good to see you. Today we are going to talk through four ways to improve your investment performance. This does not mean taking on more risk or chasing the latest trend. Often it's about getting the fundamentals right. So let's walk through four simple ways that investors can use to improve their money management skills without making things more complicated.

1. Automate and then get out of the way

Number one, this one is simple and straightforward: Automate and then get out of the way. Automate those contributions, your investments, how often you rebalance. What else?

Yeah, so especially for those people who are still working and you're in your accumulation phase: set up your 401(k)s, contribute to the amount you can comfortably contribute, set up your accounts, and then let it do its work. You can check it once a month or once every other month; you still want to be aware of it, but just let everything act accordingly. Now, if you're retired, it's a little bit different. If you have an advisor, you set your accounts—the typical standard of "buy and hold" is you're going to be in a diversified account—and you need to understand the limit of your upside because investing, especially in retirement, is completely different than accumulation. When you're investing in retirement, you really want to focus on what's your downside risk tolerance—what you can actually stomach—and then the risk capacity—what mathematically you can actually afford to lose because you will lose money at some point in time. We say "set it and forget it" then because you let the advisor develop the portfolios and then you just let those portfolios do their job. Now, if you're a do-it-yourselfer, you have to have that same principle of understanding your downside, but you just can't forget it because you are your own advisor. You have to monitor it, but then it becomes inherently difficult not to make an irrational decision. You want to stay dedicated and then monitor your accounts maybe once a week or once a month.

Number two: Consolidate. If you have old retirement accounts floating around, managing your money becomes harder, and getting a look at your whole financial picture becomes even more difficult. This is an easy but often overlooked step.

Yeah, and we see this a lot. People come into our office, they're now retiring, and they have three or four different 401(k)s from old jobs. So, we want to consolidate it into one or two IRAs at one custodian because you just have to log on to one website and you can see all your accounts right there. I say two IRAs because for some people you want to be able to use the 3-Bucket Strategy

Safety: Checking, savings, managed money. · Income: Dividends, bonds, structured notes, REITs, annuities. · Growth: Stocks, mutual funds, ETFs. If you need income in retirement and you don't have a pension, you have to turn your assets into income. You want to have an IRA for that. Then you have your other IRA for growth money. Psychologically, it's a great way to separate the two. Also, remember Required Minimum Distributions (RMDs) when you're 73 or 75. One IRA can satisfy the distributions of multiple IRA accounts. However, if you have multiple 401(k)s, 457(b)s, or 401(h)s, you have to take a distribution from each singular account. The more RMDs you have to take, the more chance you have for an error and a penalty. Lastly, it makes it easier for your beneficiaries to have everything clear and concise at one bank and one custodian.

3. Define your time horizon

Number three: Define your time horizon before investing. This can help guide your decisions when it comes to buying, selling, or holding an asset.

In accumulation, you have a long time horizon. As you get closer to retirement, you want to pay attention to that time horizon in a vacuum. If you were in 2007 and going to retire in 2008 but were aggressively allocated, 2008 wiped you out. Within that retirement "red zone," you want to understand that horizon. In retirement, you don't have as much length on that tape measure of life. Bucketing your money into time horizons really helps. If you need income within the next couple of years, make those investments more conservative. If that money is five-plus years away, that's growth. Why is five-plus years important? Because that's the typical recovery time of a long-term bear market.

Save a little more money every year. And number four, this one again is easier said than done, but just try to save a little more every year. John Iammarino: Yeah, whether it's a salary bump, a pay raise, or a promotion, try to pay yourself a little bit more. If you can just do 1% or 2% a year, that's amazing compounding interest. Come New Year's, say "I'm going to try to stretch myself 1% or 2% more." I know for a lot of people that's not possible with inflation, and that's okay, but at least you gave it a conservative effort. If you find it's not doable, you can go back and reduce your contributions later.