Once you decide to start dabbling in stock market investing it is wise to set clear and steadfast goals. Your goals will be completely different from someone else's. Over time, you will begin to change and so will all the different areas of your life. This will affect all of your financial goals, as well as how much risk you can see yourself taking with your money, especially if you go from being single to having a family with children.
One thing is still true, and that is the goal that you have set right now is what is going to work for you at this time in your life. This is what you are going to keep in mind during all of your current stock market investing ventures.
Young investors are always the ones who are out there risking the most. They are also the ones who focus on investments that will grow over time. This begins to shift when an investor gets close to middle age. At this time you would most likely become weary of high risk investments and go with more predictable growth options. Those moving toward retirement get even more conservative with their investments.
This is when people are focusing on saving the money that they have rather than trying to turn a profit. Most people in this age bracket will avoid anything that is high risk, and in general they will end up choosing things like bonds or fixed income investments. This is no time for risking money.
Since many investors have a hard time determining the percentages for bonds, stocks and cash you should put them in a certain proportion in your investment portfolio. A good rule to go by is you should keep the percentage of fixed income investments within your portfolio equal to your age. For instance, an investor that is 59 years old should keep a portfolio with 59% fixed income investments. All of the rest would be in stocks.
This does not necessarily need to be a strict rule that you always adhere to. You will need to take other things into account as well, such as your willingness to take risks. If you have a large amount of stocks in your portfolio, this reflects that you are more aggressive with your stock market investing.
On the flip side, if you don't have very many stocks in your portfolio this would show that you are more conservative about investing.
You will need to be the one who decides which type of style you want to go with. This determination will lead to your decisions on the combinations you want to have of cash, bonds and stocks. Choose the combination that most suits your personal stock market investing goals. A young investor may find that the conservative approach may hinder their ideals for rapidly reaching financial goals. However, when it comes to stock market investing every person is unique in their own investment styles and goals, the trick is discovering what yours are!
One thing is still true, and that is the goal that you have set right now is what is going to work for you at this time in your life. This is what you are going to keep in mind during all of your current stock market investing ventures.
Young investors are always the ones who are out there risking the most. They are also the ones who focus on investments that will grow over time. This begins to shift when an investor gets close to middle age. At this time you would most likely become weary of high risk investments and go with more predictable growth options. Those moving toward retirement get even more conservative with their investments.
This is when people are focusing on saving the money that they have rather than trying to turn a profit. Most people in this age bracket will avoid anything that is high risk, and in general they will end up choosing things like bonds or fixed income investments. This is no time for risking money.
Since many investors have a hard time determining the percentages for bonds, stocks and cash you should put them in a certain proportion in your investment portfolio. A good rule to go by is you should keep the percentage of fixed income investments within your portfolio equal to your age. For instance, an investor that is 59 years old should keep a portfolio with 59% fixed income investments. All of the rest would be in stocks.
This does not necessarily need to be a strict rule that you always adhere to. You will need to take other things into account as well, such as your willingness to take risks. If you have a large amount of stocks in your portfolio, this reflects that you are more aggressive with your stock market investing.
On the flip side, if you don't have very many stocks in your portfolio this would show that you are more conservative about investing.
You will need to be the one who decides which type of style you want to go with. This determination will lead to your decisions on the combinations you want to have of cash, bonds and stocks. Choose the combination that most suits your personal stock market investing goals. A young investor may find that the conservative approach may hinder their ideals for rapidly reaching financial goals. However, when it comes to stock market investing every person is unique in their own investment styles and goals, the trick is discovering what yours are!
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