Select Investments
September 28th, 2008
Step Four: Select Your Investments.
Keep in mind that the goal of a portfolio structured with some combination of stocks, bonds and cash is most likely to be well positioned to achieve the maximum return with the least amount of risk.
• Stocks.
Although sometimes volatile over the short term, stocks are considered to be the best investment for long-term growth. In fact, no other investment has provided a higher return over the long term than stocks, according to Ibbotson Associates of Chicago.
Depending on how much money you have to invest, you can choose individual stocks or buy mutual funds or unit trusts that invest in stocks.
(Before considering mutual funds or unit trusts, read the product prospectus. The prospectus, which details investment objectives, risks, charges and expenses, should be read carefully before investing or sending money.)
• Bonds or fixed income investments.
Because the rate of return is fixed, you know precisely what your return will be when you buy bonds and hold them to maturity.
You can choose different bonds with varying interest payment dates to be your primary source of investment income, since most bonds pay interest periodically throughout the year (e.g., January and July, February and August, etc.).
Click here to go to Step 5:
Monitor your results
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