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Investments

What does it mean to be financially secure? Your personal vision of success may be similar to your partner’s or your neighbor’s, but ultimately it’s quite unique. It’s like a fingerprint. The closer you examine it, the more those differences reveal themselves.

How Do You Invest Money?

All of the most common questions we get from new investors revolve around how to invest money. Investing money starts with setting your goals – how much money do you wish to make, and how much are you willing to invest?

The investment goals you have often determine the kind of account you need to open. If your goals include saving for retirement, then a 401k or similar account is best. However, if you want to invest in stocks and bonds, you'll need a brokerage account. If you aren't sure which accounts you need or what kinds of investments you need to reach your goals, consider hiring a professional to advise you.

Short term investments may not be as risky for short term goals., while your long term goals may be in a riskier portfolio as you'll have time to recover from down markets.

Is It Safe To Invest?

This is another common question for both new investors and veterans. Investment of any kind carries risk, so knowing when to take a chance and how to manage your assets so that your risk is minimized is important. The stock market has had a strong year so far, but some experts wonder if a correction is coming. A correction, or a downturn in the stock market, is normal and happens regularly. However, corrections are different from crashes, and many people worry about the latter.

You might even want to ask yourself whether it is safe to not invest?

If you're concerned about how your stocks are performing, or if you're wary of investing in the stock market in the first place, start small, and ask your investment adviser about safer stocks to invest in. Even investing in a volatile stock market can be a good investment decision. You may not make fast money, but if you invest in the right stocks during a correction, you can get some great stocks at lower-than-usual prices.

How Can I Reduce the Risks Of Investing?

The best way to control risk for your investment portfolio is to diversify, spreading your money across different types of assets. Asset allocation means that your assets are in different types of investments, such as real estate, stocks, mutual funds, and bonds. Within each asset class, you can then diversify into multiple investments.

Diversifying your assets safeguards you against volatility in the market. Different asset classes respond to changes in the market differently. So, when one is up, another could be down. The right mix in your portfolio can help weather downturns in one market sector while you profit off another.

The right asset allocation depends on your goals and your current financial situation. Over time, as your goals change, your diversification may change in response. Ideally, your portfolio should consist of non-correlated investments so that even 20% is down, the other 80% remains robust. It's important to evaluate your investments every 6-12 months to see if they still help toward your goals.

The final way to help minimize risk is to keep some of your interests liquid – about 3-12 months of expenses. This way, you'll have ready cash on hand to help you manage downturns in one investment category or to pick up some stocks or real estate when the market is down, and things are cheaper.

Are You Ready To Get Started?

At City Oaks Wealth Management, we have a deep commitment to helping our clients achieve their personal and professional goals for wealth management. We work with you one-on-one to help you find the best investment opportunities, ones that align with your goals and values. As a trusted registered investment advisor, we take your investments seriously, whether it's $1,000 or $1 million. Give us a call today to schedule your personalized consultation!