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A proper combination of domestic and international equity and fixed income securities may offer you the best opportunity to achieve the gain you desire from your investments at a risk level you’re comfortable with.
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Because Roth IRAs offer the possibility of tax-free retirement income—if managed properly—and generally have fewer restrictions associated with asset distributions and withdrawals, you may find they offer more flexibility than a traditional IRA as you plan for your retirement income needs.
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The agreement between investors and borrowers is known as a bond. It’s a commitment by the borrower (issuer) that it will repay by a specific date the amount of money lent by an investor in addition to making regular interest payments in exchange for the use of the investor’s money.
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Generating consistent investment returns over the long-haul is not easy, particularly if you don’t have a specific plan. It takes discipline to set money aside for investing on a regular basis, develop an investment plan around that process and stick to it.
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When it comes to investing, many people attempt to ‘time the market,’ and end up buying when the price is high and selling when the price is low. Studies show many investors lose money with this flawed approach, and even experienced traders with sophisticated analytic methodologies are unsuccessful in their efforts at market-timing.
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Dollar cost averaging likely represents the most practical approach for most investors to accumulate assets over the long-term. Without realizing it, many investors already utilize dollar cost averaging through their regular contributions to workplace retirement plans.
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Above all else, the Bernard Madoff investing scandal pointed out the need for you to have a thorough understanding of the strategy involved in your investments, regardless of whether you invest on your own or pay an advisor for help.
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While it doesn’t put money back in your investment account or increase the value of your securities, tax-loss harvesting can play a critical role in reducing your income tax obligation—sometimes significantly. In some cases, it may even help put money back in your pocket in the form of an income tax refund.
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A buy and hold strategy should not be confused with a ‘buy and forget’ approach. Your investment accounts require regular monitoring to ensure they’re maintaining a level of performance at an acceptable level of risk to help you meet your investment goals.
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Because achieving portfolio diversification can be challenging, some investors may find it easier to diversify within each asset class through the ownership of mutual funds rather than through ownership of individual companies in each class.
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The portfolio in your workplace retirement plan should be evaluated at least two times annually. While many retirement plans offer a limited number of investment options for their employees, it’s important to evaluate the offerings that are available to you on a regular basis and choose the funds that offer you the best opportunity to help you achieve your investment goals.
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Over time, certain assets in your portfolio will outperform others and asset class weightings will change. If the changes are significant enough, your portfolio’s desired return and risk characteristics may no longer be in place, and rebalancing efforts will be necessary to realign the portfolio with your goals.
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Bond funds have a place in most investor’s portfolios and some combination of corporate, municipal, treasury or mortgage bond funds may be appropriate for use in your portfolio depending on your income level, investment goals and timeframe and ability to tolerate market risk.
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Before you can put together an investment plan, you must decide how much risk you’re willing to take and how much volatility is acceptable to you within the value of your portfolio. Only when you have a thorough vision of how well you can handle the market variables of risk and volatility can you map out a plan that will allow you to meet your investment goals.
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While variable annuities are sold to investors as an opportunity for tax-deferred growth, the complexity of the contracts, high commissions, likelihood for high ongoing expenses, lack of liquidity, and less favorable tax treatment for withdrawals can combine to generally outweigh their benefits for most investors.
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