Blog

SMART INVESTING TIPS

Smart Investing Tips

Smart Investing Tips

Looking to begin an investing journey? We offer tips to help guide your strategy.

THERE ARE NO SHORTAGE OF TIPS FOR INVESTING. IN FACT, SPEND ENOUGH TIME WITH YOUR NEIGHBOR, AND CHANCES ARE THAT YOU’LL HEAR A THING OR TWO ABOUT MUTUAL FUND STRATEGIES, STOCK OPTIONS, AND IRAs.

And while we are partial to recommending working closely with a financial professional, there are some basic things you can do to help improve your financial health. Below are a few key considerations and strategies (please read our footnote below before investing, keeping in mind that we offer no prediction on the performance of any investment):

Be reasonable

The headlines are replete with examples of those one-million-to-one-long shots — retail investors who struck it rich with their YOLO (you only live once) investment strategies. And while these rags-to-riches stories make for compelling Internet chatter, realize that they are, in fact, the exception. Doubling your investment in days is unrealistic and unlikely. As such, develop clear investment goals and work with a financial professional to make smart, informed investment decisions that can help work towards your financial objectives.

Develop a plan

Develop a clear investment plan, including goals, risk profiles, diversification preference, and review cadence. These will help you make informed decisions while avoiding acting on those “hot” stock tips that would otherwise deviate from your preferred strategy.

Asset allocations

Asset allocation is a way of diversifying your investments over various asset categories, such as stocks and bonds. A financial professional can help you understand the general risks for each, which you can assess based on your timeframe, risk tolerance, and goals.

Risk tolerance

Risk tolerance is not just a matter of personal temperament; rather, it also incorporates an assessment of your investment timeline. For instance, if you are committed to investing for 30 years, you may have increased risk tolerance than someone who has a five-year timeline in saving for a child’s wedding. As such, these risk distinctions will dictate the proportion of various asset types in your portfolio.

Rebalance

Once you develop a plan and allocation of assets, review your plan periodically to ensure that the asset mix remains consistent. Over time and depending on the performance of individual assets, the percentage of asset class holdings may shift.

Diversify

No matter when you plan to begin investing, diversification has the potential to minimize your risk of loss. Market volatility is unpredictable, and diversifying the assets in your portfolio can help offset losses. Why? Because different asset classes perform differently depending on market conditions. For instance, when the economy is strong, stocks tend to perform well. However, when the market is down, bonds may start to tick up.

Invest early

Invest and save early and often, as a small recurring investment over a long period of time has the potential to produce greater
returns than investing a larger amount over a shorter period of time. Additionally, getting an early start allows you time to recover from errors or market downturns.

For instance, If you invest $75 a month beginning at age 25 and continue until you are 65, your earnings will be greater than the 35-year-old who invested $100 a month until reaching 65 (assuming an equal rate of interest for each). Keep in mind this is a
hypothetical example and is not representative of any specific investment. Your results may vary.

Minimize fees

Assess and review your investments (and prospective investments) for commissions, fees and expenses that may be associated
with the holdings. Review your costs and determine whether there are ways to decrease your expenses. For instance, are your holdings in actively managed funds rather than passive funds, like index tracking funds? The former typically carry higher fees. And collectively, these fees can erode your earnings.

Invest for retirement

Saving for your retirement is a personal decision that will help shape your lifestyle during your Golden Years. It’s never too early (or late) to begin investing in your future. Consider an individual retirement account (IRA) or a 401(k), which offer tax deductions and tax-deferred growth opportunities. A common guideline is to put at least 5% of your income into a retirement account.

In the meantime, the investing process is fraught with challenges. Consult a financial professional who can help guide you through the process.

 

Thanks for checking out the blog. 

Joe Breslin , CFP®

 

 


Stock investing includes risks, including fluctuating prices and loss of principal. Bonds are subject to market and interest
rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and
change in price.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.
Diversification and Asset Allocation do not protect against market risk.

This material is for general information only and is not intended to provide specific advice or recommendations for any
individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive
outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial.   Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and
broker-dealer (member FINRA/SIPC). 
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.

 

Securities and insurance offered through LPL or its affiliates are:

 

Share This Article

Facebook
Twitter
LinkedIn

You May Also Like

Year-End Tax Planning

As the end of the year approaches, it’s time to consider strategies that could help you reduce your tax bill. But most tax tips, suggestions, and strategies are of little practical help without a good understanding of your current tax situation. This is particularly true for year-end planning. You can’t know where to go next if you don’t know where you are now.

Read More »

Understanding IRAs

An individual retirement arrangement (IRA) is a personal savings plan that offers specific tax benefits. IRAs are one of the most powerful retirement savings tools available to you. Even if you’re contributing to a 401(k) or other plan at work, you might also consider investing in an IRA.

Read More »

Understanding Social Security

Almost 72 million people today receive some form of Social Security benefits, including retirement, disability, survivor, and family benefits.1 Although most people receiving Social Security are retired, you and your family members may be eligible for benefits at any age, depending on your circumstances.

Read More »

Income Tax Planning and 529 Plans

The income tax benefits offered by 529 plans make these plans attractive to parents (and others) who are saving for college or K-12 tuition. Qualified withdrawals from a 529 plan are tax free at the federal level, and some states also offer tax breaks to their residents. It’s important to evaluate the federal and state tax consequences of plan withdrawals and contributions before you invest in a 529 plan.

Read More »

A/D Juicebox Sliding into Fourth! (October 8th)

W​​​​​​​e are happy to present our A/D JuiceBox Webinar Series. JuiceBox will provide current events, financial planning strategies, taxes, investments, and general business updates.

We have a special guest, Margo Steinlage from Steinlage Insurance Agency, who will join us to discuss Medicare.

Join us as Autumn fills the air, and the time is quiet and mellow to discuss things in the financial planning world.

Read More »

Mutual Funds: Building Blocks for a Retirement Portfolio

Diversification — not putting all your eggs in one basket — is one of the most cherished principles of investing. That’s one reason why mutual funds have become a popular choice for many investors’ workplace retirement accounts. They’re an easy way to invest in many different securities at once, and to do so at a lower cost than you might be able to achieve on your own.

Read More »

Don't Miss Anything

Stay up to date with our monthly newsletter.