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Choosing Investment Strategies
If you're like many investors, you may have one or more of the following investment goals in mind when choosing investment strategies:
- Protect your money — Suppose you've saved enough for a down payment on a home and you want to be sure the money will be there when you need it. The best strategy is to park your money in the safest possible place (such as cash equivalents) while you look for the right home to buy. You're protecting it.
- Earn income — Suppose you want a regular, predictable stream of income to go along with the income from your day job. Investing in bonds or bond mutual funds may be a smart strategy, as they are designed to generate regular income from the interest payments.
- Grow your money — Suppose you'd like to pay for as much of your new grandchild's college education as you can. One strategy may be to become a part-owner in some companies (through a stock mutual fund). If the companies do well and shares of their stock increase in value over time, you could sell your shares for a profit and use it for tuition.
These articles are not meant to be a financial plan. A financial plan generally addresses a wide spectrum of financial needs including insurance, savings, investments, tax and estate planning.