One significant risk investors face isn’t losing money in a market dip; it’s failing to reach their long-term financial goals.
Many people focus on avoiding short-term losses and invest too conservatively, which can limit growth over time and may impact your retirement security.
A thoughtful approach starts with understanding three things: how much risk you’re comfortable taking, how much risk you can afford based on your financial situation and timse horizon, and how much growth you need to reach your goals.
You’ll want to find the balance between your level of risk and long-term goals.
Spreading your investments across a diverse set of investment and asset types can help manage market ups and downs while still pursuing growth, though it doesn’t guarantee profits or protect against losses.
Investing well isn’t about avoiding risk.
It’s about taking a balanced approach that merges your level of comfort with the future you’re working toward.
Investors should understand the risks involved with owning investments, including interest rate risk, credit risk, and market risk.
The value of investments fluctuates, and investors can lose some or all of their principal.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson, and Hawes Dickerson. Members SIPC.
