Tips for Investing
1:34 Min Read
Navigating the world of investments can prove difficult. It's easy to get overwhelmed, lost and frustrated with the process. But the sooner you understand the process, value, and importance of investing, the more likely you are to achieve financial security in the future. Here are some tips you should consider to help ease the investing process and improve your retirement readiness.
Get to Know Yourself Better
Your investment goals and strategies are going to depend on your unique needs. The investments of a 23-year-old are going to differ from that of someone a few years away from retirement, so before making investment decisions, understand your personal risk tolerance. Risk tolerance is the amount of market variability that you are willing to withstand. You can use MERS' Full Picture report builder within your myMERS account, to take a simple quiz to better understand your risk tolerance.
Keep Cash on the Side
It's important to be in the market to grow your wealth. But, it's also important to have some money set aside. Ideally, you want to keep a fair portion of your money in the market, so it can grow and bring you closer to retirement readiness. But if an emergency expense arises, such as a car repair, you need to have money to cover it. This cash on the side, which is ideally in an emergency savings account, will allow you to cover the expense without taking your invested money out of the market. Having an adequate emergency saving cash reserve will prepare you for unexpected expenses, while still allowing you to grow your wealth over time through investments, bringing you that much closer to financial security.
Review and Rebalance
You should spend time at least once every year reviewing your investments. This process will help to ensure that you are still on track to reach your retirement goals. If you're invested in a target date fund, you should check to ensure that your fund corresponds to your age and expected retirement. If you're not in a target date fund or have other assets invested, you should also use this as a rebalancing opportunity. Take the time to ensure that your investments are still aligned with your goals, age, and risk tolerance. If not, take the steps to reorient and realign your investments. Doing so will help make sure that you're still on track to achieve retirement readiness and financial security.
Categories: All, Investments
Tags: Financial Wellness, Investing, Retirement Readiness