Partner with a Rutherford Financial Advisor
One of the key services of a good financial advisor is to help you clarify your personal investment and retirement goals. Clearly defined goals and being realistic about ways to achieve them can benefit investors, and prevent them from experiencing the common mistakes that may derail them from their objectives.
What You Need to Know as An Investor
Appropriate investment goals should be two things: measurable and attainable.
As a financial investor, understanding your objectives and constraints will allow you to formulate a well-grounded investment plan. One that is designed to endure changing market environments and that is flexible enough to adjust to unexpected events along the way.
A sound plan will help you to stay focused on the intended contribution and spending rates. An investor’s tolerance for market risk is the primary constraint in meeting any objective. With market risk comes return. Thus, the desire for a higher return will require taking on greater exposure to market risk. Factors such as an investor’s time horizon, may cause the same investment to exhibit different risk characteristics. For instance, an investment in equities would normally be high risk for a period of less than 3 years, and a moderate risk for a period of 20 years.
What Investors Should Do
We believe investors should employ their time and effort up front on their investment plan, rather than in ongoing evaluation of each new idea that hits the headlines. This simple step can pay off handsomely in helping you stay on the path towards your financial goals.
The danger of lacking a plan is that investors are often drawn to funds which are attractive in the moment without thinking about how it will fit within their overall portfolio. Many investors are influenced by the performance of the broad stock market, increasing share exposure during bull markets and reducing it during bear markets. Such “buy high, sell low” behaviour is evident in unit trust cash flows that reflect an emotional response - fear or greed – rather than a rational one.
A sound investment plan can help the investor avoid such behaviour because it demonstrates the benefits of asset allocation, diversification, and rebalancing. With a Rutherford financial advisor, you’ll have access to not only a sound investment plan, but the guidance to achieve financial security, whether you’re a recent immigrant wanting to secure your financial future within SA or a South African individual saving for a comfortable retirement. http://ift.tt/2lfkYuy
Submitted February 06, 2017 at 07:36AM by Rutherford_Capital http://ift.tt/2laEX0A
