Where to invest?

Now to choose where those dollars will be invested.

Investors typically allocate certain percentages of their accounts to one or more of the three major asset classes: stocks, bonds and cash equivalents. Each asset class may react differently to market forces, so gains in one may potentially help to offset losses in another.* This process is called asset allocation.

 

• Stock funds
  Have historically over periods of time offered the most growth potential - but also the most volatility.
• Bond funds
  May provide some growth, though typically not as much as stocks.
• Cash equivalents
  Offer the most stability, but typically generate little to no growth.

 

What about risk?
Individuals risk tolerance will depend on their comfort level with ups and downs in the value of their investments, proximity to retirement, and your willingness to accept greater risks to pursue the individuals' financial objectives.

 

 

* While diversification through an asset allocation strategy is a useful technique that can help to manage overall risk and volatility, there is no certainty or assurance that a diversified portfolio will enhance overall return or outperform one that is not diversified. Neither guarantees a profit nor prevents the possibility of loss.