Different investments for different investors
By: Buddy Brand
Have you ever talked to a co-worker or family member about their investments, only to find that you are on completely different paths? Before you jump to the conclusion that your financial advisor has steered you the wrong way, consider that there are many investments out there. Not all are right for everyone.
Financial advisors must look at a number of factors to determine which investments are right for their clients. Not everyone has the same time horizon, for instance. If one couple’s goal is to come up with enough cash for the down payment on a house, they probably will choose a different investment vehicle than a couple whose goal is to fund their newborn child’s college education. Because the couple saving for a house will need their funds in a shorter time frame, they will likely need a stable, short-term investment, whereas the other couple may prefer a longer-term vehicle.
Risk tolerance is another factor investment professionals must consider before advising their clients. Risk is the likelihood that an investment will lose value. Generally speaking, the riskier the investment, the more its price may fluctuate. Some investors are comfortable with risk; others aren’t.
Every investor has unique goals and situations. What’s best for one investor might be inappropriate for another. Before initiating your investment plan, discuss your personal time horizon and tolerance for risk with a financial advisor.
Article provided by Frank J. “Buddy” Brand II, a Senior Vice President/Investments with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, who can be contacted in the Florence office at (843) 665-7599.