Investing Based On When You Need Your Money [Video]

A lot of investment gurus out there will tell you again and again that you have to save for your financial goals. But what they never really get around to telling you is how to do that exactly.  One way that we work with clients to determine how to invest their money is to look at the time horizon of the goal they are saving for.

Investing Short-Term Goals

Now for example you might be saving up to buy a home or a car in a couple years. So in that case, we want to make sure they are investing conservatively.

And what I mean by that is they are invested more in bonds and cash than in stocks. This is because the stock market is very volatile. It will go up and down.

The last thing we want to happen is for the stock market to have a really bad year. And for this to happen as they are getting ready to buy that house.

Investing Long-Term Goals

Now on the other hand, for long-term goals such as retirement, we would recommend that they invest more aggressively in stocks versus bonds or cash.

The idea is that even though stocks are more volatile, you have enough time and the goal is far enough into the future, such that you can ride out those ups and downs of the stock market.

Once you have the time horizon of your goal figured out, then you can take a risk tolerance questionnaire as well. That gives a more detailed view of how you and your family will react as the market goes up and down.

The great thing is, once you have this figured out, it is easier to stick to your plan because you know why you are invested a certain way.

So if there is anything we can help you with you investments, identifying your goals, and figuring out the best way to manage your investments for those goals, please reach out to us.