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TRUMP UNIVERSITY WEALTH BUILDING 101

market conditions turn very favorable, which means risk is low.
Controlling risk—not trying to beat the market—should be your guid-
ing objective.
3. Control your emotions . Investors who get into trouble typically become

too enthusiastic when prices are rising and/or they panic when prices are
sinking. Things are rarely as good as the blind optimists say, and almost
never as bad as the professional pessimists would have you believe.

4. Recognize that the investment markets themselves are not always rational .
They incorporate the knowledge and feelings of the world’s investors
on a daily basis, so they reflect the ongoing battle of those two all-

too-human emotions, greed and fear.

5. Pay close attention to the message of the markets themselves, and much less to
the news headlines, market pundits, or TV talking heads . How the markets
react to external developments is much more important that the
instant analysis of the “experts.”

6. Accept the fact that investing is more art than science, and that you’ll often be
wrong . But try to learn from your inevitable mistakes so that you don’t
make the same ones over and over.
7. Focus on the long term, not on daily fl uctuations . The longer your time

horizon, the more likely it is that you’ll stay calm and be right about
an investment. The shorter your investment time period, the less likely
you are to make and keep investment profi ts.

Now you have a good idea of how to approach the process of investing
for retirement. As you actually invest, a key question you’ll need to answer is
whether to use individual stocks or bonds, or more diversifi ed vehicles—that
is, different types of mutual funds. Individual stocks offer greater potential
reward than mutual funds, for instance, but also higher risk.
In general, I believe that most investors should use mutual funds entirely,
or primarily, unless they have the interest, the time, and the developing
expertise to research individual securities. Funds also provide the essential

quality of diversification, which you’re unlikely to achieve with fewer than a
dozen or so stocks from different industries. In fact, even as a professional
advisor, I’ve found over the years that it makes sense to use both individual
issues and funds. This enables my clients and family to benefit from my

expertise in certain parts of the financial markets, and to profit from the skills
of others who are experts in other areas.
After you retire, you don’t want to discover that you don’t have enough
resources to be comfortable. Determining how much money you’ll need to
retire is essential so that you can figure out how much you should set aside

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