With each and every investment that you make, you're going to be giving up one benefit in exchange for another. Most of the time, this trade-off is between risk and potential return. Understanding this trade-off at a conceptual level will go a long way in helping you to select the right investments (or strategies) on your path to retirement.
Article Category: Bonds
At Model Investing we frequently receive two questions from investors: Is your investment approach conservative, moderate, or aggressive? And, if I'm close to, or in retirement, how do I adjust your recommendations to accommodate my lower risk appetite? These are excellent questions, and we address each one in this article.
With the Federal Reserve having recently raised interest rates for the fourth time since the financial crisis, we thought it was an opportune time to discuss how changes in interest rates affect you as an investor. In this article we discuss the role of interest rates in an economy, how those interest rates change over time, and how those changes affect the value of different components of your portfolio.
The age-old idea of not having all your eggs in one basket is considered timeless wisdom, but could it be working against you? In truth, diversification is a double edged sword. The benefit that it provides comes at a mighty cost. When it comes to investing, most individuals aren't aware of the hidden price they pay for this so-called "free lunch."
If you've ever worked with a financial planner or investment advisor, there's a good chance you're using an investment strategy known as strategic asset allocation. While you may not know it by that name, you're probably familiar with how it works. What you may not be of aware of, however, are how recent changes in financial markets have made this approach to investing more dangerous than ever before.