When you’re interested in investing some of your funds, it’s important to consider what your feelings are as an investor. You should consider whether you’re someone who is open to the possibility of taking on some extra risk. You should also consider whether taking on extra risk makes you feel uncomfortable. And you’ll also want to consider whether you want to meet with a financial planner to obtain a clear plan for investing your funds.
A financial planner can help the financial world of risk and reward make more sense to you. Here are three types of investment strategies that a financial planner will help you understand:
Investing for the Future
First, a financial planner will make sure that you are fully protected with all of the necessary insurance policies. Having insurance is just sensible. It always makes sense to ensure that you and your loved ones are financially protected in the event of a loved one’s death or a tragic accident.
Investing for Risk and Growth
After you’ve purchased all of the insurance policies that you need, then you will need to decide whether you want to invest in a conservative or growth-oriented fashion. When you invest for growth, you will be open to investing in riskier stocks. A financial planner may have you invest in technology or pharmaceutical stocks that are on the cutting edge. You will only invest in these stocks if you make the conscious choice to be a risk-oriented investor. Otherwise, you can request that a financial planner helps you create a more long-term oriented investment plan.
Investing Funds in a Conservative Manner
People who are older will typically want to invest their funds in a conservative manner. Investing funds in a conservative manner ensures that a person will have access to these funds during retirement years. A conservative portfolio of stocks will typically have stocks that are blue-chip companies and have consistently offered a dividend to investors over the years. You may also invest in bonds or CDs if you decide to take on a conservative approach to investing. This type of investing can provide people with a greater peace of mind in comparison with growth-oriented investing.
Before you invest your hard-earned money, it’s important to determine the correct level of risk you’re willing to accept. When you work with a financial planner, he’ll not only help you choose the strategy that best fits your lifestyle, needs and desires, but he can also help you determine whether you’re a growth-oriented or long-term investor.
Photo Credit: Abi Skipp
Determining the risk level indeed is very important for those who want to start investing. One of my former clients was so sure she didn’t want to do her risk profiling and invested money on the stock market, disregarding recommendation to invest in less volatile instruments. It ended up she sold her portfolio when the market here crashed.
Investing since 2013, and in my point of view, it’s really hard and unpredictable. Especially if you just follow the people and have no experience.