By Rick Walter
5/21/2018
There are four basic steps that may enable you to develop a successful well-designed portfolio. These strategies can also carry over to your employer-sponsored and personal retirement plans as well.
Step 1: Determine your Objectives and Time Horizon
This is the amount of time that you have before you would like to reach your goal. The amount of time you have determines what types of investments that may be appropriate for you. The more time you have the more risk you may be able to assume.
Step 2: Select the Appropriate Investment Categories
There are many different types of categories of investments that are available, including alternative investments but the major categories are: Cash and cash equivalents, Fixed-principal investments, Debt, Equities, and Tangible investments (Real Estate).
Step 3: Find the Appropriate Balance
Once you have selected the appropriate categories determine the percentage of your portfolio that will be invested in each category using the proper asset allocation method that is right for you based on your risk profile. The total return of your portfolio will be determined by the asset classes that you select. Asset allocation is a method that helps you manage investment risk. Continue reading Developing a Successful Investment Portfolio