Financial Tip #3: Invest In A Way That Is Right For You

Invest in a way that is appropriate for your objectives and your comfort level. I taught a class on the Thrift Savings Plan at the US Patent office in January 2014. Many of the participants were in high spirits because the S & P 500 index had finished 2013 with an increase of 32%.

At the end of the class a woman came up to me and showed me her statement. She was invested 100% in the Government Fund (G), which guarantees not to lose principal. The G funds annual return for 2013 was 1.89%. My comment to this woman was that if she was not comfortable with any risk and was able to reach her goals with this rate of return, then she was doing very well.

The point is that you have to manage your investments for growth as well as risk. It is very important to know your comfort level and allocate your investments accordingly. The best way to do that is have a thorough review of your investments and determine if you have too much or too little at risk based on your risk tolerance. We have a simple risk questionnaire that we can email to you.

Click here to request the Riskalyze questionnaire.