On Mondays, we've been learning all about how to invest in stocks... but as I'm sure you are all aware, there's way more out there to invest in than just stocks.
If you think of all your investments as an entire pie, you should have pieces dedicated to riskier investments with higher returns, like stocks. And other pieces invested in lower risk investments, with lower but more consistent returns, like bonds. The farther you are from your end goal, the more risk you can take, and the closer you get to needing the funds, the less risk and more certainty you need.
Many retirement and even 529 plans take care of this balancing act for you - offering target date funds. These funds shift the weight of your portfolio overtime, weighting your investments more heavily in equities in the early years, and shifting it towards bonds as you get closer to retirement or your child nears high school graduation.
But you can save on fees and manage this balancing act yourself too. A common rule of thumb for retirement is to "Invest your age," or have a percentage equivalent to your age invested in bonds. So, if you are 35 years old, your retirement fund should be invested 65% in equities, 35% in bonds. *
Financial advisors can be a great resource for families of all income and levels of net worth in helping you better understand these finer points of managing your family's finances and investments. Next week, I'll be hosting @financialadvisher LIVE here on Tuesday, 2/26 at 10AM ET to answer your questions. Brittan is a registered investment advisor, and fellow ND alum! What questions would you love to ask a Financial Advisor?