by Wendell Whitman
Become A Better Investor By Understanding Risk
To be a successful investor, you need patience, discipline and a long-term vision of what you want to achieve. But you also need the ability to manage risk. And to truly manage risk, you first need to understand it.
Boulder City Magazine®
|First, you need to know your own risk tolerance. How much risk will you be willing to incur in exchange for potentially higher returns?
You’ll also need to understand your risk capacity how much risk you can actually handle, from a financial perspective.
Finally, you should know your required risk the amount of risk you’ll need to accept to achieve the returns necessary to reach your goals.
Ultimately, you must use your risk tolerance, risk capacity and required risk as factors in a comprehensive investment strategy. By creating this strategy, and sticking with it over time, you’ll be able to make appropriate investment decisions throughout your life.
Smart Investment Moves For 2010
Many investors reaped big gains in 2009. Can you expect more of the same in 2010?
Most experts predict moderate growth for the economy, which is usually good news for investors. Still, given how far the market advanced last year, you probably shouldn’t anticipate returns quite as high in 2010.
However, you can take advantage of the opportunities that do exist by following a few simple guidelines.
First, stick with a “buy-and-hold” strategy. Look for quality investments and hold them until your needs change.
Second, maintain sufficient cash in your portfolio. If the market heads south, cash instruments tend to perform better than other assets.
Finally, consider adding some fixed-income vehicles, such as bonds, which can help reduce the effects of volatility.
By making the right moves for yourself in 2010, you can continue to make progress toward your long-term financial goals.
Contact Wendell at Edward Jones www.edwardjones.com.
P.O. Box 61901
Boulder City, Nevada 89006
Phone (702) 294-1392 Fax (702) 294-1392
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