Millionaire-Maker Checklist: 3 Steps to Take Every Year to Grow Your Money

Key Points About This Article:

• Volatility could be picking up in financial markets, meaning investors may want to create a checklist of to-do items to mitigate the effects of this volatility on their portfolios.
• Here are three of the top pieces of advice I’ve seen most financial gurus provide for how to traverse such periods of wild price swings.
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Stock market volatility can arise from various factors, including economic uncertainty, inflation, geopolitical conflicts, and natural disasters, resulting in sharp value fluctuations. Impulsive investment decisions during these times often lead to poor outcomes. Thus, investors may want to consider adopting a patient approach in times like these. We’re seeing more headlines unfold around heightened geopolitical concerns in the Middle East, growth concerns out of China (once the global growth engine, though the U.S., India, and ASEAN economies are increasingly driving growth in 2024–2025) and a cooling employment market in the U.S. These factors could certainly lead to plenty of uncertainty, making it important for investors to focus on the factors they can control during periods of volatility.

In my view, the following three tips shared by many financial experts are the principles I try to follow. Here are the three checklist items I think investors ought to focus on first, to keep one’s portfolio in check throughout potentially volatile times.

This post was updated on October 11, 2025 to clarify unsystematic risk vs. total market risk, performance of diversified portfolios, Buffet’s thoughts on diversification, current employment data, China’s past designation as the “global growth engine”, and that context matters/selling too early can hurt compounding.

Focus on Diversification

Diversification simply means spreading investments across various asset classes, industries, and regions to minimize overall portfolio risk. By holding a mix of investments, poor performance in one area can be balanced by better results in another, resulting in more stable returns.

The idea of risk-adjusted returns is a fancy term various folks in the financial industry have come up with to weight returns by risk level. Greater diversification reduces overall market risk (which can’t be eliminated, only reduced), increasing a given investor’s risk adjusted returns relative to their peers. (Note that diversification reduces unsystematic or stock-specific risk, smoothing returns over time — though it doesn’t eliminate broad market risk.)

Diversified portfolios may underperform concentrated portfolios during strong bull markets but typically provide better risk-adjusted performance and less severe drawdowns over time. Buffett has said diversification is protection against ignorance (meaning skilled investors might do better with concentrated portfolios) but he recommends low-cost index funds for most people.

But for investors who smell something brewing in the market (given all the recessionary indicators we’re seeing) and who don’t buy the idea that this economic landing will be as soft as most expect, diversification can be a great idea right now. Personally, it’s something I do via holding most of my invested capital in index funds (which have very low management fees and do all the work of picking stocks for me), but to each their own.

Rebalance Your Portfolio

Portfolio rebalancing involves adjusting the weightings of assets within an investment portfolio to maintain desired risk levels. Similar to a car tune-up, rebalancing one’s portfolio can allow for stocks that have run incredibly high in a short amount of time to be trimmed, and added to positions that have slightly underperformed on a relative basis. While it’s also generally true that winners tend to run longer than many think, maintaining some reasonable range for each portfolio sector or position can reduce risk over the long-term. This ties back to the previous note on diversification, and it’s a take-it-or-leave-it piece of advice. While rebalancing can lock in gains, selling too early can limit compounding; balance should be guided by allocation targets, not emotions.

In my view, portfolio rebalancing can be very helpful, particularly if the positions within one’s portfolio are picks one truly believes in long term. If stock A and B each have similar expected returns over the long-term, and stock A greatly outperforms stock B in a given quarter or year, trimming one to buy more of the other can allow an investor to simply be in better balance (or the desired long-term balance at the onset of the creation of the portfolio).

Upholding a predetermined asset allocation for a given investment portfolio can lead to discipline and true long-term thinking. In my view, that’s the real benefit of rebalancing. Investing is a marathon, not a sprint, so staying in it for the long-haul is very important. 

Add Capital (Consistently) Over Time

Last, but certainly not least, being consistent with how one contributes to investment accounts is very important. 

Many investors are already acutely aware that compounding can work in their favor. The earlier an investor gets started putting some amount away each month, the more an investor should have in their retirement account when the time comes to sell. Starting early, and importantly contributing consistently, can lead to incredible gains over the very long-term.

Again, this speaks to the long-term investing mindset and having the ability to invest over time as well. Managing a budget, with some pre-allocated investing amount coming directly out of one’s paycheck or checking account each month into an account, can help simplify the process and automate it. That’s what I do, as I try to listen to what the experts have done in this regard. I think it’s noteworthy advice for all investors out there in this current environment.

Consistent investing helps reduce timing risk and promotes discipline, though it doesn’t ensure higher returns than lump-sum investing. Many traders and short-term investors sell low and buy high – this allows for truly disciplined investing over time, and that’s something I think everyone can and probably should aspire to.