Page 44 - Workbook3E

Where are you?
If you’re young and continue an investment for 20 years or longer, you may be more comfortable with the higher risks associated with more aggressive investments. However, if you’re older or nearing retirement, more conservative investments may be better suited to your needs. Only you can determine what “safe” means. You need to decide, in order to have workable strategies and hopefully profitable investments, both short-term and long-term.
Your Risk Tolerance:
Describe your risk tolerance as you consider various investment opportunities:
#3
3 Build a Portfolio to Fit Your Objectives
and Risk Limits
Your investment portfolio is the mix of investments you make. No
one mix of investments is ideal for everyone. You need to structure a portfolio to fit your individual needs, based on your objectives and risk tolerance. Your goals should be reflected in the way your investment dollars are spread among various types of assets.
Make your investment plans flexible enough to be modified if your investment needs change. Your portfolio can always be restructured to meet changing investment goals. Also, when building your investment portfolio, it’s necessary to plan a certain amount of money for an emergency fund for liquid cash needs.
40 Workbook 3: Prepare for the Future