Create a Strategy
Studies have shown that women tend to be more risk-averse than men. They also tend to be more patient and hold thier investments longer. While that may be good in general, having an overly conservative investment portfolio may jeopardize your ability to achieve your long-term financial goals, because not enough time is allowed to develop adequate resources. It’s important to understand that certain investment risks may be necessary to achieve your financial goals, so don’t limit yourself to only conservative investments.
Another important component of achieving your financial goals is to start investing early. Not only will this help you to ride out the inevitable periods of market volatility, you'll also have more time to reap the benefits of compounding. This is demonstrated in the following hypothetical example:
- Investor A saves $2,000 annually for 10 years-a total of $20,000-and then stops saving for the next 20 years. The value of her account at the end of 30 years is $145,845.
- Investor B waits for 10 years and then saves $2,000 annually for the next 20 years -a total of $40,000. Despite saving twice as much, the value of his account after 30 years is only $98,845.
Assets May Grow Faster if You Start Saving Early
It's critical to not be "too safe" when it comes to investing, as you could fall short of your goals. Your financial professional can help you determine your tolerance for risk and create a plan that addresses this, as well as your short- and long-term aspirations. He or she can also develop a realistic plan that works within your budget, so you can start saving early and stick with it over time. We also offer a number of tools to help you understand the keys to investing and opportunities to investment in your future. To learn more, call 800-MAINSTAY (624-6782).