- Fund Your Retirement Plans First
- Liquidity Needs
- Deposit Insurance
- Money Market Funds*
- Savings Bonds
- Emergency Funds
- Goals and Time Horizon
- Defining Risk
- What's Your Risk Profile?
- Why Take Any Risk?
- Asset Allocation
- Dollar-Cost Averaging
- Portfolio Management
- Buying Investments
- Putting It All Together
But why take any risk at all? Why not just keep your money in CDs? Different investments offer different rates of return. When you compare the returns on common stocks, bonds and cash, common stocks have had the highest rate of return over a long period of time.
Generally, the more risk you are willing to take, the greater your potential return.
SUGGESTION: Time is also a good way to reduce risk. The longer your time horizon, the less effect interim market fluctuations may have on the ultimate value of your portfolio, and the more opportunity your money may have to grow.
The differences between minimum and maximum return diminish over the long term. If you only hold a stock for a year, it could be way up or way down. But if you hold it for ten years, the spread between the expected minimum and the expected maximum decreases substantially.
Historically, stocks have the biggest range of probable returns. That's what we mean when we say that they are volatile. But it is also stocks that may have the potential for the highest return over time. The further you are from needing to withdraw your money, the more experience you have in the financial markets, and the less you sweat market fluctuations, the more ability you have to tolerate market risk. The more ability you have to tolerate market risk, the more you should consider investing in stocks. Again the same warning, just because it has been that way in the past does not guarantee that it will be that way in the future.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Franklin Mint Federal Credit Union and Mint Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mint Wealth Advisors, and may also be employees of Franklin Mint Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Franklin Mint Federal Credit Union or Mint Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
|Not NCUA Insuredor Any Other Government Agency||No Credit Union Guarantee||Not Credit Union Deposits||May Lose Value|
The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NJ, PA, NY, DE, AZ, MI, FL, MD, TX, VA, GA, NC.
Financial Learning Center content created by TrueBridge, Inc. The information provided is based upon sources and data believed to be accurate and reliable. The content contained herein is intended for information and illustrative purposes only, should not in any way be construed as a personal recommendation, and should be used in conjunction with individual professional advice.