Of the “Seven Wonders of the Ancient World,” the only one still in existence is the Great Pyramid of Giza. The long-lasting pyramid may be a good metaphor for other endeavors you wish to endure, such as your investment strategy.
In fact, by creating an appropriate “investment pyramid,” you should be able to address your key financial needs and goals. Your individual investment pyramid might include these five “layers”: cash and cash equivalents, income-producing investments, growth-and-income vehicles, growth-oriented investments and aggressive-growth instruments.
How much should go into each layer? There’s no one right answer for everyone. In filling out your investment pyramid, you’ll need to consider your risk tolerance, time horizon, short- and long-term goals and other factors.
If you build and maintain your investment pyramid with care, you can help keep it working efficiently for many years to come.
By getting the right coverage, and reviewing it periodically to make sure it’s still appropriate for your needs, you can help build the protection your family deserves.
Keep Inflation In Mind When Investing
While inflation has been relatively low in recent years, it has not disappeared, and over time, even mild inflation can seriously erode your purchasing power and reduce the “real” return of an investment.
Consequently, you should consider choosing investments that may be able to help you cope with inflation. With stocks, for example, you have an ownership stake in companies that have the ability to raise prices, which can make them effective inflation-fighting investments. Keep in mind, though, that stock prices will fluctuate, and you could lose some, or all, of your principal.
In your efforts to invest wisely, you’ll need to consider a variety of factors, including your goals, risk tolerance and time horizon.
But inflation is another variable to consider, and it can be an important one, so take steps to address it.
Contact Wendell at Edward Jones www.edwardjones.com. |
