The Importance of Developing an Investment Strategy

GRAND RAPIDS, Mich. - Feb. 4, 2014 - PRLog -- The following three considerations will help you and your financial advisor craft your strategy.

Consideration #1: Know Your Goals

Are you saving for retirement? Buying a home? Hoping to help fund your children's or grandchildren's education? Asking yourself these questions is an important first step to take. If you have a good idea of what you are working toward, that will help both you and your financial advisor determine the method and investment vehicles you'll use to work toward your goals.

Consideration #2: Determine Your Risk Tolerance

Investing your money does not come without risk. However, simply saving your money can also be risky, since you potentially put reaching your goals into jeopardy if your money doesn't grow accordingly over the years. As you and your financial advisor craft your investment strategy, it's important to determine how much risk you want to take upfront to guide your choice of stocks, bonds, mutual funds, etc. Your financial goals, your stage in life (for example, are you newly married and expanding your family, or are you close to retirement?), your current income needs and the amount of time you need to reach those goals also will factor into your risk tolerance. Your financial advisor will provide you with a Risk Tolerance Questionnaire to help determine your appropriate amount of risk so you can make suitable investing decisions.

Consideration #3: What Is Your Time Frame?

Are you looking to reach a short-term goal in a few years, such as saving for the down payment on a new home? Or is your goal, like living comfortably in retirement, still several decades or years away? It's important to understand the time parameters you're working within so that your investment portfolio can reflect those needs.

By asking yourself these questions at the outset of your investing years, you'll be able to make sure you and your financial advisor are on the same page regarding what you want to achieve, and how best to reach those goals.

Contact Edward Jones: Mark Grooters - Financial Advisor at (616) 281-9026 or https://www.edwardjones.com/en_US/fa/index.html&CIRN=431114  to start developing your investment strategy today.