Good investing can help you accumulate wealth, build an efficient income stream and fund your retirement – but to achieve these goals in a planned and risk-free way requires the right strategy, the best investments, and time.
Poor investment choices, on the other hand, lead to underperformance. And that matters.
Investors can’t waste time – or money – when it comes to their financial goals, which are likely to include:
- An emergency fund
- A homeowner contribution
- Education expenses
- Building wealth
- Retirement savings and income
What are the best investments, who offers the best solutions, and where can you find someone to work with you to develop an overall investment strategy?
Select your investment objective below to see a list of investment options and a selected team of experts ready to help you.
In addition, you will find more information on the details: the best places to invest your money, what to consider when considering investment options, how to design a growth strategy, and tips on how to implement it successfully.
Stocks represent a stake in a company. Shares are traded on public stock exchanges and can be bought or sold at any time.
Over time, shares as a whole have outperformed inflation.
However, they can also suffer steep losses, sometimes lasting several years.
Shares can be bought individually or in large groups through mutual funds or diversified portfolios.
Owning several shares instead of one or two can reduce your returns, but it also mitigates the risk of a company losing popularity or even going out of business.
Share prices depend on two things:
- The company’s business performance.
- investors’ views on the company’s future
Because business conditions and investor sentiment are unpredictable and can change rapidly, share prices can change sharply and abruptly – for better or for worse.
When price fluctuations are caused by the company or industry-specific economic factors, this is referred to as “non-systemic risk”.
Systemic, or market risk, on the other hand, which affects the entire stock market at the same time, is caused by larger economic forces, such as interest rate changes, political unrest, or recessions.
A diversified portfolio cannot mitigate both types of risk. Diversification only helps to protect against non-systematic risk.
A bond is a debt obligation issued by a government or a company. Investing in bonds is like lending money to the issuer: the issuer agrees to repay the money at a certain time and a fixed interest rate.
Despite these regular payments, the value of the bonds can rise or fall and can even cause permanent losses if the issuer fails to meet its obligations.
The extent of the risk depends on how reliable the issuer is and how far in the future the repayment date is.
Bonds can offer investors regular income and greater stability than equities alone.
However, the level of income and stability depends largely on the type of bond.
Bonds can be purchased individually or through investment funds. As bonds are usually traded in large lots, it may be more efficient for the average investor to buy bonds through mutual funds.
“Cash equivalents” is a broad term for investments that combine complete stability with easy access. They are also often referred to as liquid investments.
Cash includes accounts and instruments that do not increase or decrease in value.
They usually pay interest, but because of their safety and availability, their interest rates are usually relatively low.
Examples of cash are savings and money market accounts. Money market funds are also commonly used as cash, but they are different from money market accounts.
Certificates of deposit may be used as cash in some cases, but there are usually restrictions on their use.
Different types of investments, such as shares, bonds, and cash, are called asset classes. Each of these works in different ways, but it is unlikely that one asset class will always be able to meet all an investor’s needs.
Therefore, investors usually hold different asset classes.
A mixed portfolio is a popular way of coordinating positions between asset classes.
A mixed portfolio combines the characteristics of certain asset classes, but without the extremes.
Therefore, a mixed portfolio is usually less volatile than equities but has a lower return potential. In the long term, it should outperform cash, but it is less stable and accessible.
It is likely to provide lower returns than bonds but has higher growth potential.
There are different ways to mix asset classes to achieve the right mix of risk and return. Examples include balanced portfolios, asset allocation portfolios, and special funds.
For most homeowners, real estate is already their single largest investment. But you can also benefit from other forms of property investment beyond the house you live in.
Real estate investing can work in many different ways:
They can provide rental income
They can provide rental income
They can have the potential to generate capital growth They can simply be assets that react differently to the stock and bond markets.
Real estate investments can be roughly divided between residential and commercial property.
You can own individual properties or invest in a collection of different properties through a Real Estate Investment Trust (REIT).