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Investment Planning

Investment planning may not conjure up an exciting image in your mind - there's no doubt most of us would rather plan a vacation than plan our investments - but imagine all of the holidays you could take if you planned your investments wisely!

Here are some basics to keep in mind, whether you are new to planning or a seasoned investor.

  • Don't procrastinate. If you do, you run the risk of leaving holes in your retirement coverage. Taking a regular look at your investments will give you peace of mind.
  • Beat inflation. Whenever possible, seek out investments that have stayed ahead of inflation.
  • Invest regularly and make it a habit. Investing is much less painful this way. Arrange to have a fixed sum of money deducted each month from a bank account and deposited directly to your brokerage account.
  • Educate yourself. Making informed investment decisions requires that you do your homework.
  • Know your risk tolerance. Figure out what you're comfortable with and make sure that your investment plan is structured with diversification in mind.

plan, plan.ning:

  • 1: to arrange the parts of
  • 2: to devise or project the realization or achievement of

Planning Defined

Planning need not be an intimidating or dreary process. Think about how often you have said "I plan to..." or "we're planning to..." This can mean anything from planning a vacation, arranging an event, or writting a business plan. You should approach an investment plan in the same way you would plan anything else. Break it down into manageable tasks, and don't strive for the "perfect" plan - there isn't one. The simplest approach is to start as early as you can, and continue to add to your investments regularly.

Setting Goals

  • Be as specific as you can about what it is you want to accomplish with your investment plan.
  • Look at differing time frames for your investment plan - 5 years, 10 years, 20 years, 30 years - and revisit your plan every year. As your personal situation changes, so too may your goals.
  • Prioritize your goals and know what's most important to you.