Developing Your Investment Plan
Questions you should ask yourself when developing your investment plan include:
- What goals do I want to achieve with my investments?
- How much do I need to invest to achieve my goals?
- How much can I afford to invest?
- What is my risk tolerance?
- What am I doing to protect myself from investment fraud?
- Have I checked my investment professional’s background on Investor.gov?
Diversification of Investments
Diversification can be neatly summed up as, “Don’t put all your eggs in one basket.” The idea is that if one investment loses money, the other investments will make up for those losses. Diversification can’t guarantee that your investments won’t suffer if the market drops. But it can improve the chances that you won’t lose money, or that if you do, it won’t be as much as if you weren’t diversified.