Six_Things_You_Need_To_Know_About_Managing_Your_Investments

Six Things You Need To Know About Managing Your Investments Six Things You Need to Know About Managing Your Investments . 1 Understand your personal investment objectives 2 Consider the basic principle of diversification 3 Remember that a good investment program focuses on your personal investment strategy 4 Understand the concepts of risk and reward and your tolerance for risk 5 Consider the principle of dollar-cost averaging 6 Always consult your advisor when you make major investment decisions 1. Understand your personal investment objectives Financial experts identify five typical objectives. Your investment objectives may fall into more than one of these categories. You should know your primary objective when making your investment decision. Take a moment to review these objectives and determine their importance to you. Preserving capital - you value the safety and stability of your investments. Growth - your focus is beating inflation and maximizing the return from your investments. Maintaining liquidity - you want easy access to your money. Reducing tax - your goal is to reduce your overall tax burden. Income - you want to generate an income from your investments. 2. Consider the basic principle of diversification It's often said ... "don't put all your eggs in one basket." Experts agree that spreading your risk over more than one type of investment reduces your overall risk and, for most people, provides better long-term growth. investment, risk, return, personal, objectives, investments, understand, principle, make, consider, take, strategy, reward, potential, one, market, dollar-cost, decisions, averaging, tolerance, tax, should, remember, rate, provide, program, principal, portfolio, overall, over, major, long-term, income, identify, growth