What are investments?


Investments are essentially income-producing assets that are alternatives to cash. Common types include stocks, bonds, mutual funds, exchanged traded funds, index funds and real estate. Stocks, bonds and funds are purchased using an investment broker. You can also choose to purchase your investments using an online platform like Betterment or E-trade. Or, you can hire a broker who makes purchases on your behalf.

Why is it important to have investments?


Investments are a vital wealth-building tool. Cash may be safe but will earn very little interest in the bank. Plus, it is very difficult to build long-term wealth without taking a bit of risk. If you’re an investing beginner and nervous about taking the leap, learn how to get started with investing here.

Why should I manage my investments?


You should manage your investment portfolio because a lot can go wrong with your money. For instance, the stock market swings up and down, recessions come and go, and career and life changes happen. Plus, there are housing bubbles that burst, leading to a loss of value of your real estate and a drop in the market. So, it’s vital to have the right strategy. Your investment strategy is dependent upon factors like your age, goals and risk tolerance. 

How do I manage my investments?


Managing your investment account doesn’t have to take a lot of time or effort if you get the right strategy in place. There are generally two ways to manage your investment portfolio. One way is to manage your portfolio “actively”. This means that you are actively picking stocks and bonds, and making trades, sales and purchases. Another way of managing your investments is “passively”. With passive investments, you pick a variety of stocks, bonds, or mutual funds and hold onto them.

Regardless of whether you are managing your investment account actively or passively, most experts recommend diversification. What does diversification mean? You’ve heard the saying don’t put all of your eggs in one basket! When investing, it’s wise to choose a fund or a variety of stocks, funds and/or bonds. Did you know that the younger you are, the riskier your investment portfolio can be? But, the older you are, the more conservative your investments should be? Figuring out your strategy doesn’t have to be a challenge. We’re here to help you understand the different types and which may be right for you.

Discover professionals in our network


Finding a professional in your area to help you improve your personal finances is another excellent step on your journey to create wealth and financial freedom. A professional, such as an investment advisor, has first-hand knowledge and experience with investments. These professionals can answer any questions that you may have regarding your unique circumstances and help you customize a strategy that will best fit your financial needs.

Explore our personal finance insights


Looking to learn more about investments? Immerse yourself in our insights that focus in more detail on how to better understand, manage and improve your personal finances.

 

 


Ready to start investing your money? Investing can feel overwhelming. But, no matter your age or net worth, you can start investing today! It’s never too late or too early to grow and manage your money. Explore these personal finance insights that focus on how to start investing your money. Determine if you need a…