Corporate Investors | Tracking Investments for Corporate | Institutional Investo

1. Things to Consider Before You Make Investing Decisions

2. Given recent market events, you may be wondering whether to make changes to your investment portfolio. Investor Education and Advocacy is concerned that some investors, including bargain hunters and mattress fillers, are making quick investment decisions without considering their long-term financial goals. While we cannot tell you how to manage your investment portfolio during a volatile market, we are issuing this Investor Alert to provide you with the tools to make an informed decision. Before making any decisions, consider these important areas:

3. 1. Draw a personal financial roadmap. • Before making any investment decisions, sit down and take an honest look at your entire financial situation, especially if you've never made a financial plan before. • The first step to a successful investment is determining your goals and risk tolerance, either on your own or with the help of a financial professional. There is no guarantee that you will make money on your investments. But by knowing the facts about saving and investing and following a smart plan, you can gain financial security over the years and enjoy the benefits of managing your money.

4. 2. Assess your comfort zone when taking risks. • All investments involve a certain degree of risk. If you intend to buy securities, such as stocks, bonds, or mutual funds, it is important that you understand before you invest that you could lose some or all of your money. Unlike deposits with FDIC-insured banks and NCUA-insured credit unions, money you invest in securities is typically not federally insured. You could lose your principal, which is the amount you have invested. That is true even if you buy your investments through a bank. • The reward for taking risks is the potential for a higher return on investment. If you have a financial goal with a long-term horizon, you are likely to make more money by carefully investing in riskier asset categories, such as stocks or bonds, rather than restricting your investments to lower-risk assets, such as cash equivalents and mutual fund tracking for corporate. On the other hand, investing solely in cash investments may be appropriate for short-term financial goals. The main concern for people who invest in cash equivalents is inflation risk, which is the risk that inflation will outpace and erode returns over time.

5. 3. Consider a suitable mix of investments. • By including asset categories with investment returns that move up and down in different market conditions within a portfolio, an investor can help protect against significant losses. Historically, the returns of the three main asset categories (stocks, bonds and cash) have not risen and fallen at the same time. The market conditions that make one asset class perform well often cause another asset class to perform medium or low returns. By investing in more than one asset category, you will reduce the risk of losing money and the overall investment returns on your portfolio will be more fluid. If the return on investment in one asset category falls, you will be in a position to offset your losses in that asset category with better investment returns in another asset category. • Additionally, asset allocation is important because it has a huge impact on meeting your financial goal. If you don't include enough risk in your portfolio, your investments may not return large enough to meet your goal. For example, if you are saving for a long-term goal, such as retirement or college, most financial experts agree that you will probably need to include at least some stocks or stock mutual funds in your portfolio.

6. 4. Be careful if you invest heavily in employer stock or any individual stock. • One of the most important ways to lower the risks of investing is to diversify your investments. It's common sense: don't put all your eggs in one basket. By choosing the right group of investments within an asset category, you may be able to limit your losses and reduce fluctuations in investment returns without sacrificing too many potential gains. • You will be exposed to significant investment risk if you invest heavily in your employer's stock or any individual stock. If that action goes bad or the company goes bankrupt, you will probably lose a lot of money (and maybe your job).

7. 5. Create and maintain an emergency fund. • Most smart investors put enough money into a savings product to cover an emergency, such as sudden unemployment. Some make sure they have up to six months of their income in savings so they know it will be there for them when they need it.

8. 6. Pay off high interest credit card debt. • There is no investment strategy anywhere that performs as well as, or with less risk, than simply paying off all the high-interest debt you may have. If you owe money on high-interest credit cards, the smartest thing to do under any market condition is to pay off the balance in full as quickly as possible.

9. 7. Consider the average cost in dollars. • Through the investment strategy known as "dollar cost averaging," you can protect yourself from the risk of investing all your money at the wrong time by following a consistent pattern of adding new money to your investment over a long period of time from corporate Investing service. By making regular investments with the same amount of money each time, you will buy more of an investment when its price is low and less of the investment when its price is high. Individuals who typically make a lump sum contribution to an individual retirement account, either at the end of the calendar year or early April, may consider "dollar cost averaging" as an investment strategy, especially in a volatile market. .

10. 8. Take advantage of the employer's "free money". • In many employer-sponsored retirement plans, the employer will match some or all of his contributions. If your employer offers a retirement plan and you don't contribute enough to get the maximum equivalent contribution from your employer, you are passing up “free money” toward your retirement savings.

11. 9. Avoid circumstances that may give rise to fraud. • Scammers read the headlines too. Often times, they will use a highly publicized story to attract potential or institutional investors and make their "opportunity" sound more legitimate. The SEC recommends that you ask questions and verify the answers with an unbiased source before investing. Always take your time and talk to trusted friends and family before investing.

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