Stocks And Bonds

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Building Toward Your Goals

Like everyone else, you have long-term financial goals such as buying a home, financing your child's college education or financing a comfortable and secure retirement. One way to achieve those goals is to invest some of your savings in stocks and bonds.

The purpose of this article is to help you understand how to evaluate those choices. You will learn about the major types of stocks and bonds, and how to choose the ones that match your goals and your risk tolerance. In the process, you will learn what questions to ask brokers and how to gather the information you need to make competent investment decisions.

If you are ready to begin investing for long-term financial goals, consider the following before you invest.

• What is my investment goal? Is it to keep my money safe or to grow the value of my investment?
  
  
• What personal and financial circumstances might impact my investing activities? Age? Other financial responsibilities? Current and expected future income?
  
  
• How much risk can I tolerate? Am I a risk-taker and willing to watch my investment possibly suffer negative consequences for the opportunity to obtain higher returns?
  
  
• Are there federal income tax issues I should consider when I invest?
  
  
• How long can I leave my money invested? Short-term — 3 years or less? Intermediate-term — 4 to 6 years? Long-term — 7 years or more?
  
  
• Do I have the time, resources and knowledge to manage individual investments, or should I consider mutual funds or a financial advisor?