Asset Allocation
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Investing might feel daunting at first, but starting early can make it easier to build your future nest egg. Since all investments carry some risk, it's crucial to have a strong financial base before you dive in.
4 ways to make sure you’re ready for investing
Diversifying your investments is a key strategy for managing risk by allocating your money across different asset classes. While each investment type carries its own risks, diversification can help lower overall risk and improve potential returns. Keep in mind, though, that it doesn’t ensure success, prevent losses, or guard against market fluctuations. Here are some key things to make sure you have covered to make sure you’re ready.
You have a steady income, which sounds obvious, but it’s important.
You have money left over after meeting your financial obligations.
You’ve considered the effect of upcoming personal changes, such as marriage, children, or divorce, before investing.
You’ve built up your savings, including a 3-6 month emergency fund, before establishing an investment account.
What you need to have in your investment portfolio
Diversifying your investments helps manage risk by spreading your money across various assets. While different investments come with varying levels of risk, diversification can reduce overall risk and potentially increase returns. However, it doesn’t guarantee success, protect against losses, or shield you from market risk.
Stocks represent ownership in a corporation, offering high return potential and significant risk, making them suitable for long-term goals like retirement rather than short-term objectives.
Bonds, used by entities like companies and governments to finance projects, include details on the principal repayment date and interest terms and are often suitable for medium-term goals or for reducing risk in a retirement portfolio while still allowing for some growth potential.
Cash equivalents, like money market funds and U.S. Treasury Bills, provide low-risk, lower returns and are ideal for short-term goals or for increasing safety in your retirement portfolio as you approach retirement.
Alternative funds like Private Equity, Venture Capital, and Real Estate offer diversification beyond traditional fixed income, with low correlation to equity markets and historically strong risk-adjusted returns.
Achieve your best financial life with a strategic plan
Do you need help getting started? FieldGuide Financial offers personalized guidance to help you define and reach your retirement goals.
We provide:
Experienced advice on various investment types and their roles in a diversified portfolio.
Tailored investment strategies that align with your financial objectives, risk tolerance, and timeline.
Insights into professionally managed investment options that might suit your needs.
Regular meetings to monitor progress and make necessary adjustments.
