In Part 1 of our Investment Alternatives series, we revisit the Investment Alternatives chapter from Financial Success for the Rest of Us and explore a different way to think about investing: investments are tools, not a way to simply get rich. In this conversation, we discuss:
- Why your financial goals should determine how you invest
- Why stocks can be a tool for long-term growth
- How bonds can help preserve money needed for near-term goals
- Why “bonds buy time for your stocks to do their job”
- The important difference between risk and volatility
- How your time horizon changes the risk of an investment
- Why calling yourself “conservative” or “aggressive” may not tell the whole story
- Why a “safe” investment isn’t necessarily the right investment for a 30-year goal
- How to think about market declines without automatically changing your investment strategy
Rather than asking, “What’s the best investment?”, a better question may be: “What is this money supposed to accomplish?”
This is Part 1 of our series. Come back for Part 2 as we continue exploring investment alternatives and how they can fit into a broader financial plan.
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