Staying on Track
Keep on target right from the start
The following list highlights seven key points to keep in mind when you're beginning to invest — and to plan your financial future.
- Set goals — Determine how much money you will need and when you will need it. Monitor your financial plan frequently and adjust as required.
- Start now — Take advantage of the "magic" of compounding. While you may always have excuses to put off investing, now is the best time to start, even if you can afford only $50 or $100 per month. It could mean the difference between a frugal retirement and one that matches your goals.
- Diversify — To help reduce risk, diversify your investments across a spectrum of asset classes. Mutual funds may provide additional diversification within asset classes. They also provide the benefit of professional management, though this comes with a fee.
- Focus on tax advantages — Don't miss out on tax-advantaged opportunities that may be available to you through a combination of retirement plans, municipal bond investments and tax-deferred annuities.
- Consider stocks for growth — Over time, stocks have outperformed more conservative investment classes and inflation. Stocks also have more potential risk and volatility.
- Continue systematically, be disciplined and patient — Small, regular payments may be a great way to build your retirement savings. When considering a systematic investment plan, you should note that programs of periodic investment do not assure a profit or protect against a loss in a declining market. You should also consider your ability to continue investing during declining market periods.
- Consult an investment professional — He or she can help you develop a plan to help you reach your goals.
Learn more
Explore other Investing Essentials topics through the menu to the left. Access extensive reference materials through the Literature Library. Or contact a financial advisor for advice on the right investment strategy for your specific goals.