Investment Advice

In order to invest properly and to increase your assets to ensure your financial security, you need to develop a long- term  investment  plan. In order to do this, factors like your age, stage of life, personal priorities and risk tolerance have to be considered in order to design an  investment  strategy that meets your needs.

It is a well-known fact that every  investment  can be risky, but some  investments  have a greater risk than others. Risk tolerance is the amount of money you feel comfortable investing with the risk factor in mind. If you are basically a conservation person, then you will probably be most comfortable taking limited risks by investing in cash, secure stock and fixed income  investments . If you consideration taking moderate risks, than you could consider putting your assets into growth stocks, and if you are willing to take significant risks, then high-risk  investments  are for you.

There are different types of  investments  to choose from. Stocks are equity  investments  that give you a share in a corporation. Bonds or fixed income securities pay interest over a fixed period of time. To understand mutual funds you need to know that they are diverse equity funds that pool money together from many different investors for greater buying power. Futures are obligations to buy or sell a specific commodity at a preset price on a specific day. Options give you rights to buy or sell a specific stock, bond, etc at a preset price during a specified time period.

The term asset allocation simply means how you divide your  investments  between stocks, bonds, mutual funds and cash equivalents. This depends on your financial goals, when you want to achieve them, and your willingness to risk. Next in line comes diversification that allows for further spreading your  investments  between the major asset categories of stocks, bonds and cash equivalents. Diversification helps you decrease your  investment  risk. As you know, no  investment  is risk free. Without risk, there would be no reward.

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