LISTING OUT THE PRIORITIES
What are your priorities when it comes to inves ting?Areyousimply looking to retire as soon as possible, or do you have other factors at play? Pondering such questions is a crucial step to take. Regardless of your priorities, remember to diversify.
“It would be terribly naïve for an investor to put 100 percent of his or her capital in stocks, under the belief that doing so will protect the value of an investment port- folio from the risk of rising interest rates,” McAbeer writes. “In fact, the opposite may ultimately be true and heavy stock allocations might actually increase one’s risk of loss as a result of rising interest rates, particularly if one is heavily exposed to the high-dividend-yielding sectors such as utilities, pipelines, real estate, and telecommunications.”
For the individual who plans on working until the age of retirement, investing conservatively for a longer period of time (long-term investments) will result in a hefty retirement fund, and can be done fairly easily by examining the rate of return you desire and finding a mutual fund which will average t hats pecific rate of return over 10 years’ worth of time.
Short-term investments tend to be more risky, as they put faith in being able to offer a quick turnaround on the rate of return, but this can be a good option, if you seek out professional advice.