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Investing is like a journey – you’re saving over a period of time with a destination (such as retirement) in mind. Your goals are unique, and your investments should reflect that. But should your portfolio’s focus change over time?
If you’re just starting your career, retirement may seem light-years away. But don’t wait to start planning for it – at this point, time is on your side.
You can likely afford to be more aggressive with your investments because you have more time to make up any losses. But you’ll also want to factor in your appetite for risk. Your financial advisor can help you gauge how much risk you’re comfortable taking.
More volatile investments can rise faster in a good market – but also can fall further when the market is down. The older you are, the less time your portfolio has to recover from these potential market drops.
Your financial goals, comfort with risk and amount of time until you need the money help determine your portfolio objective. The table below shows how this works.
You can see that, regardless of how much risk you’re willing to take, your portfolio objective shifts as you move into retirement.
What doesn’t change, though, is Edward Jones’ investment philosophy of quality investments, diversification and a long-term focus. Your financial advisor will re-evaluate your portfolio objective throughout your life to help keep you on track.