 Basic Investing Rules Your next determination is how you should be invested for the long haul. First, figure out what your mix of stock funds, bonds, and cash should be. This is also known as asset allocation. There are two key factors to consider when picking your asset allocation: your risk tolerance and how many years you have left before retirement. Of course, we have a staff of Registered Investment Advisers ready and able to help you in sorting out your investment goals. In picking the right funds for your portfolio, we will help you make sure you diversify your investments. That means don't over-invest in any one sector such as technology or in any one investment style, such as growth stocks or value stocks. Your investment growth also, in part, depends on your starting age of participation. Let’s look at a hypothetical example: Using a $600 annual savings goal, and assuming you are thirty years old, how much would this money be worth at retirement? |
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Basic Investing Rules (continued) Let's assume an interest rate of 5% - THIS IS NO GUARANTEE, BUT FOR ILLUSTRATION PURPOSES ONLY. If you contribute only $600 per year ($50 per month) to your plan for every year you work to age 65, the following chart shows you how much you would accumulate:
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