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Christine Benz is director of personal finance with Morningstar US. This article was written for US investors but includes themes that are relevant for Australian investors.

My husband looked up from reading the business page the other day. "The 15-year is under 3.5 per cent!" Ever since we refinanced our mortgage several months ago, he's been ritualistically checking out mortgage rates, simultaneously kicking himself as they've dropped lower and lower.

What seemed like a can't-miss interest rate of 3.875 per cent for our 15-year mortgage now looks senselessly high: had we only held out, we might have been able to save hundreds over the life of our loan. Refinancing again, unfortunately, will cost us more money and could eat up any savings from securing a lower interest rate.

Stock investors often engage in a similar form of mental masochism. They buy a stock at what they think is a reasonable or even cheap price but then berate themselves if it drops even further after they've purchased. They fixate on not catching the absolute bottom.

But whether you're a rueful mortgagee or a sorry stock purchaser, I say stop beating yourself up. True, the realm of personal finance and investing is a land of numbers, and that might mislead many people into believing that their decisions, too, must be precisely on target.

They noodle over whether to hold 5 per cent or 6 per cent in a commodities investment, for example, how to pick a large-cap growth fund that doesn't overlap with their mid-cap growth holdings, or whether they should buy Abbott Laboratories at $52 or wait until it drops to $50.

There's nothing wrong with paying attention to such details when investing. Yet for those with a finite amount of time to devote to their investments (um, everyone?) it's far more important to concentrate their energies on making sure their investment decisions are directionally right rather than precisely so.

Here are some key ways to make sure you get your portfolio headed in the right general direction, even if you're not precisely right with some of your calls.

Put the odds in your favour with an appropriate long-term allocation

The concept of building a long-term strategic portfolio that's diversified across several asset classes is a perfect example of the "direction, not perfection" concept. After all, you can't know in advance what precise asset-allocation framework will deliver the best combination of high reward with low risk over your time horizon.

Instead, the best you can do is to use data on historic asset-class returns and current market valuations, combined with a dash of good-old common sense, to help point your portfolio in a reasonable direction.

For younger people who won't need their money for many years, that means a relatively high weighting in equities, which have historically generated higher returns with higher volatility than bonds and cash.

By contrast, people getting close to or in retirement need to shift portions of their portfolios into bonds and cash because stabilising a portion of the portfolio helps the retiree achieve stable cash flows in retirement. Specific allocations might vary, but getting that direction right is essential.

Use rebalancing instead of market-timing

For an illustration of how even the best investors can't time market calls precisely right, flash back to October 2008, when Warren Buffett wrote a New York Times article saying that he was buying US stocks.

With the benefit of hindsight, we know that he was too early: stocks continued to drop for the rest of 2008 and into early 2009, and early March 2009 would've been a much more attractive entry point than fall of 08. But did he make the right call directionally? Yes, particularly if he continued to buy after he said he was doing so.

Instituting a regular rebalancing plan for your long-term portfolio, rather than dramatically shifting your allocations around, is one of the best ways to ensure that your portfolio is leaning in the right direction at big market inflection points. Such a strategy will ensure two important outcomes.

First, it will help you maintain the risk/return profile of your portfolio so your longer-term return potential will stay aligned with your objectives while also tamping down your portfolio's volatility.

Second, because rebalancing involves trimming winners that have outgrown your target allocations and adding to losers that are underrepresented, you are in effect selling high and buying low.

Will you always be selling at a peak and buying at a bottom? Certainly not. But over time those little automated so-called contrarian bets can keep you rolling in the right direction.