Tuesday, July 26, 2011

Solid Portfolio Investment Financial Planning Methods

By Selena Martin


Having a portfolio investment financial plan is important for achieving your financial goals. Once you create your individual plan, it is also important to stick with it, and not let your emotions get you off track. Your plan should be realistic and complete so you are able to act on it. Make adjustments when you need it but stay with the plan to reach your goal.

Figure out how much money you can invest with over a period of time. Establish how much returns on your investments you are expecting to achieve. Decide which tools work best for your individual situation. Many different services offer a variety of investment tools.

Some prefer to go with a professional service. Find a reputable one that will take the time to listen to your goals and help you achieve them. Others may choose to invest on their own using an online investment account. A combination of the two can also be a part of a solid plan.

Separate long term goals from short term ones. For instance, a child's college education or a retirement fund is considered longer term where as a vacation or holiday gifts is more short term investing.

It is always crucial to factor in the amount of risk you are exposing your portfolio to when investing. Creating a hedge to manage risk can be an important way to protect your returns. This can be done through different strategies such as options and diversifying your portfolio. Shorting is also an option but none of these should be tried unless you have learned how to do them properly or spoken with a professional. There can be even greater risk when investing without the proper tools and knowledge.

Diversification is a key component of any solid investment plan. Putting all of your eggs in one basket is never very wise. If all of our money is tied up in one security and something happens to that security you could lose your investment. Having a diverse selection of securities can help you hedge against the unknown future.

By sitting down and creating a plan for your future you can determine your dreams and goals and a way to achieve them. It will help you to prioritize in order to make them come to pass. It can keep you from going astray when you are not thinking clearly about things. Applying a reasonable and attainable plan to your life is a great way to financial freedom.




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