Putting Your Money to Work
Investing is part of an overall wealth management plan that puts your money to work with the intent of creating more value. It starts with your overall goals. When you're creating your investment goals and strategy, your advisor will begin by asking you three basic questions:
- What do you want to achieve? Goals are very personal to you and the life you envision for yourself. They are the foundation for your wealth management plan and your investment strategy.
- What is your risk tolerance? Are you young and want to take a few risks for higher potential gains? Or might you need your investment funds soon? Perhaps a more conservative strategy might be in order.
- What is your timeline? Are you in your early working years? In mid-career envisioning retirement on the horizon? Perhaps you're retired and looking to manage your wealth wisely for your remaining years. Your timeline figures heavily into your investment plan.
Your Investment Goals and Plan
An investment is defined as an expenditure of time, money or effort that has the potential to return greater wealth in the future. Investments come in various forms, including, but not limited to, stocks, bonds, mutual funds, real estate, business ventures, whole life insurance and annuities.
Within the context of your wealth management plan, healthy investment planning starts with your investment goals and creating a strategy to meet them. Investment goals could include paying for your children's college, saving for retirement or donating to charitable causes.
A Few Words About Risk
All investments come with an element of risk. A healthy portfolio balances those risks. Suppose your portfolio contains stocks, bonds and real estate, for instance, and stocks take a tumble. In that case, it is possible but unlikely that all three categories will be impacted at once, maintaining greater overall value.
Generally, higher-risk investments have the potential of a higher return yet are often more volatile. Balancing your portfolio with less volatile investments, even though they may have a lower potential return, can go a long way toward staving off large drops in your portfolio's value.
An FHFG Advisor's Role
Forest Hills Financial Group (FHFG) advisors counsel you on achieving your financial goals using different types of investments. We are not registered investment advisors who buy, sell or trade securities. We partner with Park Avenue Securities, a respected broker-dealer and registered investment advisor, for these services.
One of the most significant hazards to successful investing is human emotion. Investing decisions based on emotion often end in disappointment. Part of your FHFG advisor's role is to be a voice of reason, always returning you to your goals and plan. Your advisor will encourage you to keep three things in mind about your investments:
- Patience – We suggest focusing less on short-term fluctuations in your investments and more on long-term potential.
- Diversification – When you spread your funds between different classifications of investments, you can realize gains in one area to help compensate for losses in another.
- Consistency – In investing, time is your friend. Starting where you are and adding to your investment account on a regular basis can help achieve true wealth with the least financial strain.