Narrowing down investment options
If you are stumped about which options to choose, here are some criteria to help you find the right option.
10:49 29 December 2013
When you are ready to invest money, you are faced with a plethora of options. Choosing one or a few options can be challenging to say the least, and there is a lot of information to sort through. There are a few points you can consider to help you try to narrow down your options.
- Purpose—there are different reasons people invest. You may want to simply create growth for retirement so you can purchase an annuity later, create more income, or generate funds to leave to loved ones. Your purpose can help you narrow down your options.
- Initial investment—one of the ways that you can narrow down options is by considering the amount of money you want to provide for your initial investment. There are certain types of investments, which require more money up front than others do.
- Risk—one of the more important factors to take into consideration would be the level of risk with which you are most comfortable. This depends on how long you have to save, how much money you need, and how much you can tolerate losing if the investment does not turn out as planned.
- Involvement—everyone is different, and certain individuals may want to be more involved in the management and direction of the investments. Other individuals may not have the time to dedicate to such a pursuit, or may feel more comfortable with a financial professional managing the direction of the investments.
- Tax burdens—certain investments may receive tax reductions, or special treatment. This may or may not be a concern for you, but it is definitely something to consider. It is very important to know the tax requirements, and to know what to expect for tax burdens.
There are many different options to invest and financial advisors can help you select the right ones for you.