The Basics of Investing

Question: if you had to build your next car, could you do it? Even though we spend most of our time in cars, for most people, the answer is no. Instead you likely trust an experienced mechanic to keep it running. Finances are similar. You use money every day and may even be familiar with some investing strategies. But until you work with a professional financial advisor, your financial plan may be stuck in second gear, even when you’ve taken many of the right steps.

NEVER TOO EARLY TO START

One of the easiest ways to retire with financial confidence is to start saving early in your career. By getting on the investment road early, you’ll be better able to maneuver its hills and valleys. Hypothetically, at age 25, if you start investing approximately $380 a month for retirement, and your money earns, say, an annual rate of return of seven percent (compounded), you can reach $1 million by age 65. At age 55, at the same interest rate, you’ll need to invest nearly $6,000 per month to achieve $1 million in 10 years. A financial advisor can help you create an investment plan, give good tips along the way, and support you in sticking to your plan for the long-term.

MAKE SENSE OF THE BULLS AND THE BEARS

Did you feel confounded at the word “compounded” above? Don’t worry; an advisor can help explain financial concepts and their impact on your investments. Are we in a bear market now? Or is it a bull market? What’s the difference? An advisor understands the full picture and uses his or her experience to guide your portfolio.

ADVISOR INVESTMENTS AREN’T CLOUDED BY EMOTION

For many people, money is an emotional topic. With the stock market, for instance, everyone hopes to buy low and sell high. Or perhaps we want to get ahead fast with the next big tech stock. Whatever our motivation may be, investing based on emotions leads to poor decision making. Working with an advisor provides objectivity in our investments and leads to better choices.

AN INVESTMENT PLAN TAILORED TO YOU

Let’s think back to the car: It can be the car of your dreams. Regardless of the model you choose, the mechanic will keep it in top shape. Perhaps your dream car is a smooth sports car, as easy on the eyes as it is the environment. Or maybe you plan on a rugged SUV that can tour the back country. Or maybe you want a safe European model for a growing family. Like your car, your investment portfolio should reflect your values and goals. Then, as your life road changes and shifts, your portfolio should chart the updated course, too. A financial advisor can work with you to create a custom plan and stay on track with your long-term goals.

PLAN FOR GROWTH – AND FOR PROTECTION

Some investments can create rapid financial gain, but with greater risk. Other investments are less risky, and their growth is slow and steady. Neither approach is all good or bad. Instead, the goal is to find the balance between various investments, including stocks, bonds, and whole life insurance. Through experience, and a full view of the road, advisors can help you create a balanced mix of investments.

At the start, your long-term investment plan is an unknown road. Without a good map, you may find yourself circling in the cul-de-sac. But with a financial advisor helping you be more financially confident, you’ll be prepared to make better informed financial decisions.

Brought to you by The Guardian Network © 2018. The Guardian Life Insurance Company of America®, New York, NY

2018-62394 Exp 06/20