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Because investing is not a sure thing in most cases, it is much
like a game – you don’t know the outcome until the game has been
played and a winner has been declared. Anytime you play almost any
type of game, you have a strategy. Investing isn’t any different –
you need an investment strategy.
An investment strategy is basically a plan for investing your
money in various types of investments that will help you meet your
financial goals in a specific amount of time. Each type of
investment contains individual investments that you must choose
from. A clothing store sells clothes – but those clothes consist
of shirts, pants, dresses, skirts, undergarments, etc. The stock
market is a type of investment, but it contains different types of
stocks, which all contain different companies that you can invest
in.
If you haven’t done your research, it can quickly become very
confusing – simply because there are so many different types of
investments and individual investments to choose from. This is
where your strategy, combined with your risk tolerance and
investment style all come into play.
If you are new to investments, work closely with a financial
planner before making any investments. They will help you develop
an investment strategy that will not only fall within the bounds
of your risk tolerance and your investment style, but will also
help you achieve your financial goals.
Never invest money without having a goal and a strategy for
reaching that goal! This is essential. Nobody hands their money
over to anyone without knowing what that money is being used for
and when they will get it back! If you don’t have a goal, a plan,
or a strategy, that is essentially what you are doing! Always
start with a goal and a strategy for reaching that goal!
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