Building a solid investment plan requires more work than opening a savings account and buying a few stocks. To create the one that’s right for you, it’s important to determine what you want to accomplish and set some goals for your money and your future. Here, the wealth management experts at Rudolph Investment Group, located in Annandale, VA, discuss how to choose the right type of investment plan.
Wealth Management: How to Find the Right Investment Plan
1. Explore Age-Appropriate Investment Options
Your age determines which plan you should choose. The younger you are, the more risk you can afford to take because you have time to recover from a low-performing account or market downturn. Investors in their twenties can allocate more of their portfolio to small-cap and growth-oriented investments. If you’re nearing retirement, choose fixed-income and large-cap ones.
2. Examine Your Financial Situation
Take a close look at your budget to determine how much disposable income you have to invest. You should first make sure you have sufficient funds for three to six months of expenses in an emergency situation and enough to cover monthly bills. Then, figure out how much of the remainder you would like to invest.
3. Determine Your Risk Profile
Decide how much risk you are willing to take with your investments. Even if you are young, you may not always want to select volatile accounts with a higher potential for growth if you have a lower tolerance. Choose bonds and money market funds if you prefer low-risk investments and stocks if you are comfortable with higher-risk ones.
4. Set Your Goals
Think about how much money you will need when you retire, and calculate the amount you should save each month. Set some realistic short- and long-term investing goals for yourself. These objectives and the amount of time you have are important factors in developing an investment plan.
The wealth management professionals at Rudolph Investment Group will work with you to devise a long-term financial plan that fits your needs. Give them a call at (757) 656-5753 to speak to an advisor. You can also visit them online to learn more about their long-term investing options.