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Investment Goals

You work hard to earn a comfortable living for yourself and your family, and you’d like that standard of living to continue throughout the years.  In order for this to happen, you’ll need to earmark some of your excess income toward creating a portfolio of investments. There are many different types of investment vehicles in the financial marketplace, and every investor has unique financial goals and objectives that he or she would like to achieve.  You must first determine your personal investment goals and objectives before making any investment decisions.

Risk Tolerance

Each individual investor also has a unique tolerance for the various levels of risk associated with different types of investments.  The investment vehicles you select should be in line with the risk you are willing to accept.  From conservative to aggressive, your tolerance for investment risk will affect how your investment decisions are made.  Remember, very few investment options offer guarantees and there is a possibility that your investment may not perform as well as you’d like.  In fact, it may lose money. Your investment strategy should take that fact into consideration. 

Time Horizon

The amount of time you plan on having your money invested will also have a significant impact on your investment decisions.  Certain types of investment vehicles are better suited for long-term investors, while some are better for short-term.  It is very important to have an idea of your investment time horizon before committing to an investment opportunity.

Asset Allocation & Diversification

According to a recent study, greater than 90% of an investment portfolio’s return can be attributed to proper asset allocation.**   Properly allocating your investment dollars into the various types of investment classes (stocks, bonds, and cash) may help to reduce the risk involved in investing your money.  Likewise, properly diversifying your investments among the different types of asset classes may also help you achieve your investment goals.  When designing an investment portfolio, it is of critical importance to utilize a proper asset allocation strategy which takes your investment risk tolerance and time horizon into consideration.

**Source: Brinson, Singer, and Beebower. “Determinants of Performance II: An Update,” Financial Analysts Journal, May-June 1991, pp40-48.

Cost of Investing

All investment products carry some type of cost associated with investing.  That cost may come in the form of up-front fees, ongoing account expenses, back-end fees, or a combination of all three.  Investment costs may have an effect on the performance of a particular investment opportunity.  There may also be opportunity cost to putting money in a certain investment vehicle and missing out on the opportunity to invest in another.  It is extremely important to fully understand the cost structure of an investment opportunity before committing your money.

Portfolio Management

As times change, your investment goals and tolerance for investment risk are also likely to change.  It is also possible that your investment choices have not performed as well as you had hoped.  To address these issues, it is important to review your portfolio at least once a year in order to properly adjust for any changes that have occurred in your personal investment objectives, as well as changes in the financial markets that have affected your investment performance. 

Let Us Help You With Your Investment Concerns!

For many investors, the daily demands of balancing a career, home maintenance, and time with the family leave little time for monitoring their investment portfolio.  These responsibilities also make it increasingly difficult to stay on top of investment-related issues such as market performance, new investment opportunities, tax-law changes, and many of the other issues that may have an impact on an investor’s financial decisions.  Contact us with your investment questions by completing the information request in our guestbook.

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