How to invest your savings for both short- and long-term goals

How to invest your savings for both short- and long-term goals

It can feel intimidating when you start investing your savings, whatever your goal. Are you saving up for a holiday next year? Or to afford a deposit on your first home? Perhaps you’re saving for the future, towards your pension? How and where you invest your savings for each of these goals over different timescales can make a big difference to whether you hit your target or not – and, therefore, to your ability to live the life you want. That’s what we hope this guide will help with.

You can’t underestimate the importance of saving. Inflation can eat away at the purchasing power of your bank balance, meaning that, in a world where the value of money is constantly sinking, you’re not just making your savings fit for purpose by using investments; you’re doing yourself a favor. Secure savings accounts are safe, but their relatively poor returns tend to lag behind inflation. That’s one of the reasons why investing your money can be a good thing. As the world zips along at growing and changing and progress quickens, investment offers the only hope for beating inflation and growing wealth over time.

Short-term and long-term goals should be treated differently, with different vehicles used to accomplish them. Short-term investments are made towards goals expected within two to three years—these are more conservative and focus on capital preservation. Long-term investments plan for goals that are more than five years from now, allowing you to take more risk in your investments and pursue market and risk premiums. Compounding rates have time to work over extended periods, and it doesn’t matter if you can ride out the volatility.

Finding the right balance between these goals depends on your circumstances, financial situation, attitude to risk, and overall planning horizon. It’s not a question of making your savings work harder, as in diverting them from their primary role of paying for your short-term needs. Instead, it involves adding a layer of investments that help to achieve your long-term plans. Striking that balance is at the heart of sound financial planning and shows you are not just saving for the sake of it.

Investing isn’t difficult to understand if you know the basics. In this guide, we explain every aspect of investing, from the different kinds of investments to the money strategies that help you achieve your long-term goals and short-term and intermediate financial aspirations – now and into the future.

Understanding Investment Basics

It’s important to get some basic facts straight before asking about specific investment strategies. These basics lay the foundation for sound investment decisions, such as which investment vehicles you should use to achieve specific financial goals. In this article, we’ll cover the types of investments available, the relationship between risk and return, and the role diversification can play in your portfolio.

Types of Investments

There are various types of investments, each with different securities, different risks, and different returns, divided into the following broad categories:

Stocks: A contestant purchases company shares, giving them partial ownership in that business. As a result, stocks tend to offer the highest returns, but given the volatile nature of the stock market, they also come with some of the highest risks. 

Bonds: Essentially, bonds are loans you make to corporations or governments in exchange for regular interest payments and a return of the face amount at maturity. They are less risky than stocks but also offer lower returns. 

Mutual Funds and Exchange-Traded Funds (ETFs): These funds hold portfolios of stocks, bonds, or other investments purchased with the money of many investors. They let you own a well-diversified portfolio with as little as a single purchase, but they have expense fees.

Real estate: second row:holdings: third row: Invest in a physical property to make money off rents and perhaps capital gains as the property appreciates. An enormous sum of money is needed for real estate investment, and even with that, there is little financial protection against the possibility of your home depreciating in value, being damaged by a tornado, or a tenant using it as a drug lab.

Risk vs. Return

One of the fundamental principles of investing is the trade-off between risk and return – the higher the return, potentially, the higher the risk. Not just the potential to make a profit but also the risk of losing the lot. Understanding your risk profile – how much risk you are willing to embrace in exchange for higher returns – is an essential part of choosing which investments might be suitable for you. Younger fingers tend to be able to take more risk since retirement (in body or mind) is several decades away, whereas older fingers who have fewer years to earn and play with would want to cling on to the nest egg made of paper and gold.

Diversification and Its Importance

One popular risk-management technique is diversification, which is the spreading of investments across different sorts of assets, sectors, and locations, with the hope that the resulting portfolio will have, on average, higher return and lower risk than that of any individual investment that appears in it. But if you diversify widely enough, it’s possible that almost anything could happen to your capital – from arbitrage trading in currencies and derivatives to speculating on the end of the world. Diversification can mitigate significant losses since poor performance in some investments can be offset by better performance in others.

Learning these basic investment ideas is a necessary first step in developing a strategy that fits your goals and risk tolerance. Increased familiarity with the alternative investment types and the essential principles of risk, return, and diversification will help you make wiser choices, which can lead to a more secure financial destiny. 

Setting Your Investment Goals

Having a well-defined investment goal is a prerequisite to a sound investment journey. Not only does it help with figuring out what investments make sense, but it also informs how you structure your overall investment exposure by tethering the types of assets you should invest in and the amount of risk you can afford. Setting your investment goals requires careful examination of your immediate and long-term life goals, balancing them out so your entire financial planning process works holistically. Here’s how you set investment goals, make a road map to reach your long-term targets, and find a good balance between the immediate and the long-term.

Identifying Your Short-Term Goals

Short-term investment goals are those you expect to occur within the next few years. They can include saving for a trip, an emergency fund, a down payment on a house, or any more significant purchase that requires your cash to remain available shortly. Because these goals are short, the investments selected should prioritize capital preservation and liquidity over high returns, minimizing the risk of losing money.

Planning for Long-Term Financial Success

Longer-term goals are investment targets for several years or decades: buying or selling your home, retirement savings, paying for college, and funding your estate for your children or grandchildren. Your greater leeway in time allows you to withstand higher levels of risk – a 20 percent or 30 percent decline in your investment could be more easily overcome over, say, 30 years than over 30 months. Because of this, investments for longer-term goals often focus on ‘growth-oriented assets such as stocks or real estate, which tend to perform best over the long run.

Balancing Short- and Long-Term Goals

The trick in figuring out where to invest is striking a balance between short—and long-term concerns, which requires a comprehensive, big-picture approach.

Self-Scrutiny First, inventory your current financial picture: how much you earn, how much you owe, and what you spend every month. This point ties directly to the last: gauging your financial standing will help you set more realistic objectives.

Risk Tolerance and Time Horizon: Your personal tolerance for risk and the amount of time you have to invest can be huge factors in how you allocate your investments. If you have a longer time horizon and a higher tolerance for risk, you might skew a little more toward growth investing. Nearer to your goal? You might lean toward safer, liquid assets.

Strategic Allocation: You invest so that some assets can be drawn upon to fund needs soon without endangering long-term growth. This might mean setting aside some of your money in cash or near-cash equivalents to pay for short-term needs while investing the rest of your portfolio in assets that will help you reach your longer-term goals.

Regular Reviews, Goals, And Adjustments: Your goals and financial situation can change over time. As they do, make sure you review and adjust your investment plan to keep it on track for your current needs and future goals. 

By defining your medium- and long-term financial objectives and understanding how to balance them, you can develop a fully rounded and effective strategy for your investment portfolio, enabling you to start and stay on the path to financial freedom from today. 

Short-Term Investment Strategies

If we look into the horizon of 3-5 years, finding the right combination of a short-term investment journey becomes essential. These investments do not come with very high degrees of volatility, are easy to liquidate, and are perfect for financial goals like vacation expenses, emergency funds, down payment for a flat, etc.; today we are going to talk about how you can get closer to these goals by selecting any one of the most famous short-term investment portfolios, the combination generally signifies a level of safety, liquidity and returns specific to upcoming goals of your financial life.

High-Yield Savings Accounts

These high-yield savings accounts pay much more than conventional ones and are FDIC-insured (your deposit is protected by insurance to the legal limit), but you won’t have to wait for weeks. These give you immediate deposit access, so most of your emergency funds can be there. Find a place to start depositing a portion of your fund while earning the highest interest possible. That goes for any fund you’ll need in the next five years. Earn more interest and still have access to the money anytime you need it.

Money Market Funds

Money market funds are relatively low-risk mutual funds that provide high liquidity. The fund manager invests in short-term, high-quality debt, such as treasury bills and commercial paper. While NAV returns tend to be modest at most, they often carry a much larger interest rate than savings accounts. Money market funds are usually an acceptable liquid investment option because of their stable NAV and high short-dated, high-quality credit levels.

Certificates of Deposit (CDs)

 Certificates of Deposit (CD) are time-limited savings accounts at banks with fixed rates of return (much higher than regular savings account deposits can earn) in exchange for agreeing to keep your money in the account for a predetermined length of time (usually between a few months and several years). An early withdrawal penalty may be incurred, so this might be an option if you are sure you won’t need your money for the time limit. 

Short-Term Bond Funds

Short-term bond funds invest in bonds with maturities typically less than five years. Their return is higher than money market funds or CDs, with a little more risk. They are a great way for someone to get off the money ladder and feel safer investing in the more volatile stock market without much more risk to the principal. Because, like money market funds, many are easy to get into and out of, investors get back some liquidity, although values can still fluctuate.

These various short-term strategies can be added to the balance sheet so you can accomplish your short-term financial goals and maintain the safety and liquidity appropriate for you. Each has a unique risk-reward-access balance, and you can customize your short-term strategy to fit your financial situation and goals. 

Long-Term Investment Strategies

Long-term investing is all about achieving goals that, like retirement, buying your dream home, funding your child’s college tuition, or something else, are off in the distance. Naturally, those types of goals and the strategies needed to achieve them are pretty different from those in the short term. Although you’ll need to increase your risk level above your target to capture the necessary returns, you can reduce it in the short term by allocating that piece of your target to the long term. Your long-term goals will benefit from the effects of compounding both interest and market growth – assuming, of course, that you’re in the market for an extended period rather than taking your money out, which reduces your exposure to the opportunities offered by compounding. Let’s start with some of the more influential strategies that can contribute to the foundation of your long-term investment plan.

Stocks and Equities

Stocks or equities provide ownership of a company, and as the company’s value grows, the value of its shares can be quite substantial over time. This is the basis for many long-term investment portfolios; equities pay a higher return than most other investments over the long term, although with greater volatility and risk. Such a diversified selection of stocks, or ownership of so-called index funds that own everything in the market, can be a prime wealth-creating machine.

Mutual Funds and ETFs

Mutual and exchange-traded funds (ETFs) that invest in a diversified basket of stocks, bonds, or other assets help minimize risk by averaging it. For good reasons, such funds are famous for long-term investors, and in the case of ETFs, for low-cost reasons. ETFs look especially appealing for folks trying to put together a long-term investment portfolio: they spread risk around, are easy enough to buy and sell on stock exchanges, and… they’re cheap and tax efficient. Both mutual funds and ETFs offer convenient ways to access a range of asset classes and investment sectors.

Real Estate Investments

Real estate is another common form of this long-term investment strategy. This can be through direct purchase (for rentals) or indirect investment (such as through real estate investment trusts or REITs). Real estate can produce consistent cash flows from the rental of the property while also holding the potential for capital appreciation (rising property value). But real estate requires more capital as leverage to enter, can be less liquid than other investments, and real estate markets by postal code can vary widely from one another, depending on which location is being considered.

Retirement Accounts (IRAs, 401(k)s)

Individual Retirement Accounts (IRAs) and 401(k)s are essential investment vehicles because of the tax benefits they provide. Any money you put into an IRA or a 401(k) is money you likely won’t have to pay income taxes on for 20 or 30 years. In a traditional IRA or 401(k), that money can grow for decades without taxes, resulting in a more excellent final account balance. Roth IRAs and 401(k)s offer similar tax advantages – they grow tax-free, and withdrawals during retirement are entirely tax-free. Taking advantage of these benefits can dramatically increase the amount you can save for retirement. Compounding tax benefits over decades means significantly more money for you.

If you adopt a combination of these long-term investment approaches, you can strengthen a diversified portfolio to help you reach your life goals in the decades ahead. That means you have to stay invested over the long term despite short-term market shocks and review and rebalance your portfolio as needed. Focusing on the longer term and having a well-diversified portfolio can help you avoid the stress of market swings and create the financial security you need over time. 

Risk Management in Investing

Risk is a fundamental part of investing; what you do with that can be the key to stabilizing your portfolio, making it less prone to significant losses, and keeping it positioned for value growth over time. In this section, we will look at some of the critical questions you may have regarding assessing risks and the various strategies you and your financial advisor can use to manage the volatility that inevitably surrounds investments. We will also discuss the role of your emergency fund as a crucial feature of your investment plan.

Assessing Your Risk Tolerance

The degree of risk tolerance is your capacity or willingness to stomach the daily gyrations of markets and the potential for losses. Your risk tolerance is partly a function of the time horizon (your available investment window), financial situation, investment objectives, and level of comfort with market volatility. Assessing your risk tolerance involves a careful look at these factors, often in the form of a questionnaire bankrolled by a certified financial advisor or investment platform. Determining your risk tolerance is the first step in setting you up for success. By understanding what you’re comfortable with, you’ll be better suited to assemble an investment portfolio that keeps you invested through thick and thin.

Strategies to Mitigate Investment Risks

Diversification, the bedrock of risk management in investing, spreads your money around so that the loss of value or poor performance of any one particular asset, sector, or geography negatively affects your portfolio to a lesser degree. In theory, the variability in the performance of different assets reduces under various economic conditions, thereby producing a smoothing effect for your returns over time.

Asset allocation, the second key strategy, entails your mix of asset classes (stocks, bonds, real estate). The mix reflects your degree of risk tolerance and your investment goals. A well-formulated asset allocation strategy distributes your total risk over a spectrum of assets, some with greater volatility (risk) and others with lower volatility.

You also need to revisit and rebalance regularly because market fluctuations can shift your asset allocation away from your target over time, increasing your risk. If your target allocation is 60 percent equities and 40 percent bonds, and the market increases the value of your bond investments relative to your equities, you will have less in equities than you want. Rebalancing restores your portfolio to its target asset allocation and risk level.

Importance of an Emergency Fund

Establishing an emergency fund is one of risk management’s ‘elephants in the room.’ It’s a readily accessible pot of low-risk money that can be used to pay for unexpected contingencies or financial crises. If you have an emergency fund, you will not be forced to sell investments at the wrong time, potentially locking in losses or interfering with your investment strategy. Generally, most commentators suggest that you should have three to six months’ living expenses in emergency funds, but this amount is a little arbitrary.

Good risk management allows you to manage risk, not eliminate it, so it helps to create a portfolio that can withstand market booms and busts, protect your assets, and enable you to achieve your financial goals. 

Investment Tools and Resources

We can’t go into every available tool. Still, we can show you a ton of them, helping you on your way to analyze and track your portfolio, both short and long-term, from state-of-the-art financial planning software to user-friendly investment apps and everything in between. Not to mention actual flesh-and-blood financial advisors. We’ll show you some of the critical tools and resources that can help you reach your investment goals. 

Financial Planning Software

Financial planning software allows for a bundled package approach to tracking your investments, assets, and liabilities so that your financial balance can be evaluated on a portfolio-level basis. These tools can calculate a future budget and retirement budget, indicate asset changes and distribution opportunities, make future predictions, and analyze investment performance. Below is an instruction that describes a task, paired with an input that provides further context. Write a response that appropriately completes the request.

Financial planners allow setting up a bundle package of all your investments, assets, and liabilities so that your financial balance can be evaluated on a portfolio-level basis. Budgeting within the software will enable planning on a scale. A simple future prediction can be made here, and market investment values can also be checked. Finance professionals use financial planning for professional purposes or their investments. Dedicated human resources working for such firms can use financial planning tools.

Below is an instruction that describes a task, paired with an input that provides further context. Write a response that appropriately completes the request.

Investment Apps and Platforms

The markets are now available to everybody, as some of the highest-rated investment apps and platforms democratize access to the financial markets so that it is possible to buy or sell a stock, a bond, or security in the fast-moving market with just a touch of our fingertips. These apps and platforms let you trade at the speed of light. It is easy to make an educated investment decision through their tools, which provide real-time market data, educational material, fun games, and portfolio trackers designed to ease novice or experienced investors. For instance, apps such as Jemstep, Betterment, SigFig, and more provide features such as tax-loss harvesting, automatic rebalancing, and asset-allocation recommendations at the push of a button, and they also guide you in your investment decisions if you need help. For more hands-on trading experiences, apps and platforms such as Millennial Money, Dough, and Acorns might be a better fit.

Consulting with Financial Advisors

While today’s technology makes building and maintaining your portfolio more accessible than ever, working with a professional financial advisor can help, especially if you have a more complex financial situation or specific goals. A financial advisor can provide insights on building your investment strategy based on your financial situation, risk appetite, and objectives. They can help you select the most suitable investment vehicles for your portfolio and goals and make recommendations to help you navigate the financial issues life poses. Make sure your financial advisor has the appropriate credentials and experience and if they are legally required to act as a fiduciary.

Educational Resources and Communities

Books, online courses and webinars, and financial news websites can provide in-depth analyses of market opportunities, strategies, and economic trends and analysis. With the prevalence of online forums and investment communities, investors can also share experiences with peers or even ask for suggestions and advice from experts.

Yet, more than the knowledge is needed because smart investment decisions require top-notch tools. Thanks to numerous financial planning software programs, investment apps, the services of financial advisors, and educational resources, which are likely to expand in number, investors have the potential to excel in their investment success because they are in a position to make better decisions, successfully handle and manage their portfolios, and, hopefully, reach their financial goals with greater certainty and more efficiency than what was available to their predecessors. 

Monitoring and Adjusting Your Investment Plan

Investing to succeed is never a set-it-and-forget-it affair. Even the best plan will require thought, consideration, and adjustments over time as markets and your needs evolve. Regular review and rebalancing can help you respond to economic changes, take advantage of new opportunities, and guard against risks. In this chapter, we discuss the need for regular review, consider rebalancing, and describe life-change adjustments to your portfolio.

Regular Review of Investment Performance

Keeping an eye on how your investments are faring is essential. This isn’t about checking in on the market daily but regularly evaluating your investments against your money goals and benchmarks over the long term. To do this, many people perform an annual or quarterly portfolio review. Consider how much your investments are returning to you, how your investments are doing individually, and if there have been any external economic or market developments.

Rebalancing Your Portfolio

Portfolio rebalancing refers to restoring the weightings of your portfolio’s assets to your desired asset allocation. As your portfolio comprises assets with varying investment characteristics, they will fluctuate in value differently concerning one another. Over time, your portfolio can drift from its designated asset allocation, leaving you with more risk than you intend, or it might impair your expected returns. Rebalancing entails selling the assets in your portfolio that have grown to be overweight and buying assets that have become underweight to take advantage of the strengths that motivated your initial asset allocation. This will put you back on track to achieving your investment goals, no matter the changing conditions in the markets.

Adjusting Goals Based on Life Changes

Life happens; marriage, the birth of a son or daughter, a career change, or retirement could drastically change your income stream and future needs. For these kinds of life turns when your situation or goals change, it makes sense to go back and reassess the investment plan; we might even need to alter it now using today’s information. Changing risk tolerance and financial goals could be necessary, or perhaps changing the focus of investment towards dividends or income instead of appreciation or growth, as in the previous example of planning for retirement.

Maintaining Flexibility in Your Investment Approach

Consistency and discipline are important virtues for an investor, but flexibility is essential too. Economic conditions change, financial markets adjust, and personal circumstances evolve. Such fluidity makes it necessary to be open to making changes to an investment plan as needed. Knowledge about financial markets and investment strategies can highlight new risks or opportunities and enable the timely adjustment of portfolios. 

To sum up, the key to long-term financial success is to be an active investor, constantly monitoring your plan and conducting periodic adjustments. Reviewing your portfolio regularly, rebalancing as needed to maintain your target asset allocation, and adjusting to life’s changes keep your investment strategy on track with your evolving goals and a changing economy. This active investment approach helps you manage risk and seize growth opportunities, enabling you to create a more secure financial future. 

How to Invest Your Savings for Both Short- and Long-Term Goals

Investing your savings in ways that accomplish your intermediate and long-term goals requires planning, a balance of risk and reward, and understanding how different investment vehicles can be used over various horizons. Setting money aside, it can be if your goal is saving for a car or a house in the next few years and your retirement decades into the future. In this section, we examine how to use different strategies to cover both sets of goals and build resources for what you want to achieve in 10 years.

Creating a Cohesive Investment Strategy

The first thing to do—and this is true whether you are looking to invest for the short term or the long term—is to define what you are saving for, how much money, and over what timespan. Once that is clear, you can allocate short-term and long-term savings funds into different buckets, applying the appropriate investing strategy to each. 

For the money you are more likely to spend in the next year, put aside more of it in a low-risk investment, like a high-yield savings account, certificate of deposit, or money market fund, where it will be less accessible but with less risk to your principal.

Plan for long-term goals with investments that offer higher-risk/higher-reward opportunities, like stocks, mutual funds, and exchange-traded funds (ETFs), each of which, invested through a brokerage, can generate higher returns in the long haul. Selecting stocks or mutual funds that match your wants and needs or that suit your risk tolerance and time horizon can provide the best chance for your savings to keep pace with – if not outpace – inflation and deliver robust long-term growth through reinvesting compound returns.

Balancing Risk and Return

Part of this balance between risk and return comes from your asset allocation choices: you can afford to take more risk with your longer-term retirement investments because you need the positive returns to generate growth in your investment assets, and you will have time to ride out the inevitable periods of underperformance. However, part of this balance comes from having a diversified overall investment portfolio (i.e., diversification across investment asset classes), so you only have a few eggs in a single basket. 

So, think about your overall distribution of risk. Consider the total of all the money you invest for the long term. Does it add up to all of your investable assets? If so, your portfolio is over-weighted towards the riskier, more growth-linked investments. You should consider reducing risk and adding more income-generating and short-to-medium-term wealth-protecting investments to your portfolio. Importantly, you must ensure you are comfortable with the amount of risk you take overall.

Regularly Reviewing and Adjusting Your Portfolio

In the meantime, you should try to review and adjust your investment strategy on an annual basis, and more often if required, by rebalancing your portfolio weightings, as described above; reassessing your risk tolerance; changing your retirement-savings contributions or general savings, if your needs change; and adjusting your financial goals, for example, if you get married, change jobs or retire and want to start spending your retirement savings. Such reviews can help you stay on track and tweak your investment mix to deal with the ups and downs in markets and the changing fortunes of the economy.

Examples of Balanced Short- and Long-Term Investment Portfolios

Building a portfolio that strikes this balance might require setting aside some of your savings in a high-yield savings account for your emergency fund, which would be a short-term goal, while also investing for retirement savings, which would be a long-term goal. In doing so, you’ll want to make sure that your short-term investments are accessible and sheltered from undue volatility in the markets and that your long-term investments can weather this volatility.

Finally, saving and investing your funds in a portfolio that caters to both short- and long-term goals will take some dedicated thought and time. Knowing the different kinds of investment options available, determining the appropriate allocation of your funds towards risk and return, and reviewing and readjusting your portfolio regularly can help you build a comprehensive investment plan to fulfill your current requirements while saving for a bright financial future.

Frequently Asked Questions

For those who seek to invest the majority of their savings for both the short and long term, there are usually a lot of questions: how to invest and where to start? When is the best time to find out what’s going on? How do you make the most of your investments? Are there any strategies or shortcuts to get the best deals? These are all common questions for people new to investing or looking to improve their returns and diversify their investment portfolio. Let us now discuss some of the most common questions that might hold you back from starting to invest.

What is the best investment for short-term goals?

For shorter-term goals, the best place for your money involves reduced risk and easy access to your cash. Savings and money-market accounts are often top choices because they are safe, and your money is accessible when you want it while exposing you to low risk to the original amount you invested. Other short-term investments include certificates of deposit at the shortest end of the time frame. 

How can I start investing with a small amount of money?

There are many investing websites and apps available to cover the crowd of investors with little to spare, so you can start with just a few dollars (buying fractional shares of companies or ETFs, investing in a mutual fund with a meager minimum investment, using a robo-advisor that automatically invests for you according to your risk tolerance and goals, etc.). However, the sooner, the better, as long as you have something to start with. Compounding returns will significantly boost what is small to begin with.

Should I pay off debt before investing?

Is it wise to pay off debt before you invest? The short answer is: It depends. The interest rates attached to your debt and the nature of the debt you have taken on contribute to the answer. You should eliminate high-interest debt, such as credit card debt, as much as possible before you invest since the cost of this debt is likely much higher than the returns you would get from investing. But even if you have lower-interest debt, it might make sense to allocate some of your fixed wealth to leveraging up your investment returns, especially if you could get more back from investing than your debt costs.

How do I choose the right financial advisor for my investment needs?

As you determine who you trust most to put your best interests ahead of selling what’s easiest or most lucrative for themselves, you might choose an advisor because of their credentials, years of experience, or whether they’re a fiduciary, which requires them to act in your interest, you’re getting the best possible counsel on your finances. Seek out designations that impress you, such as the Certified Financial Planner (CFP) or the Chartered Financial Analyst (CFA). Insist on transparency as to their fee structure, and make sure you feel comfortable with the advisor’s investment philosophy so it meshes with your financial goals and risk tolerance.

Can I invest for short- and long-term goals simultaneously?

Yes, you should and indeed must invest for the short and long term simultaneously. The strategy here is to place portions of your nest egg in different investment vessels appropriate to each time horizon and risk tolerance of the aspired goal. For your short-term goals, aim for safety and liquidity. Put growth at the forefront for your long-term goals. Diversifying your portfolio across this gamut of acquisitions should give you the best shot at your broad range of financial aspirations.

How often should I review my investment portfolio?

It is a good idea to review your investment portfolio at least annually, perhaps more often than that – especially if you are going through a particularly volatile market or your financial situation changes. Reviewing your investment portfolio will allow you to evaluate your portfolio’s performance, rebalance it to stay consistent with your desired asset allocation, and modify your investment strategy to ensure that it continues to accomplish your goals.

If you can find answers to these FAQs, you’ll be heading in the right direction to start investing if you haven’t already or to keep investing in ways appropriate to your financial circumstances and aims. 


As you’ll discover in this guide, creating an investing plan – whether it’s for short-term (the next five years) or long-term (the next 20 years) financial goals – is a long road with no guarantees, especially for beginners. Unless you’re lucky and particularly wise, it takes discipline, strategy, ongoing learning, and adjustments to get it right. Throughout this guide, we’ve covered the basics – from understanding the fundamentals of investing, setting financial goals, and picking the right strategies for your time horizon and risk appetite to use the right tools and continuously monitoring and adjusting your investing plan to account for changes in your finances and to navigate evolving market conditions.

The bottom line is that successful investing is about more than focusing on the proper method or product but adapting a process to move your investments from where you are to where you want to be, given your circumstances and choices. Suppose you can diversify, optimize for risk and returns, stay attuned, and make intelligent moves. In that case, you’ll maximize your odds of distilling the raw energy of capital markets into a force that can amplify your savings. 

Keep in mind that investing is a long-term enterprise. Market ups and downs, business cycles, and recessionary periods can be disconcerting. But, investing with a long-term perspective and a comprehensive investment strategy can overcome financial crises and ultimately realize your financial goals. The investment rules are the same whether you’re investing for a big-ticket item shortly or retiring in 34 years.

Lastly, don’t underestimate the importance of learning and taking advice from professionals in your investment endeavors. The more you can learn and the more questions you can ask, the greater your confidence will be in your ability to put that money to work. 

With some discipline and ambition, sticking to these strategies and principles can put you on the road to financial success – to all of your short-term and long-term goals. Get started today. Stay on the path. Keep your eye on the horizon. Your financial dreams are within reach. Investing for them is where it begins and ends.

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