As women take on more responsibility and independence with financial matters, we need to make sure that we are contemplating the big picture. With the multitude of choices out there, it can be confusing and frustrating trying to do the research and due diligence in picking the right choices for you and your situation. Below are a few things to keep in mind to help you along the way.
If you feel you don’t know enough about investing, you aren’t alone. Plenty of people know less than they should when it comes to how to handle their money. The problem is they don’t admit it or recognize it and as a result, their choices can cause them problems. A good investor recognizes when they need to ask questions or when then need to ask for help.
If you make a mistake, can you admit it and deal with it? Many people have suffered more because of failure to recognize a mistake and failure to handle it sooner rather than later. There is a saying “Good investors know how to take profits; great investors know how to take losses.” Ever person experiences losses. The smart ones follow a discipline that helps them know not only when to put money in but also when to adjust or sell.
Can you be patient? Knowing how long you have is a very important key to life choices. Your time horizon is the financial way of saying how long will your money be invested. Will you need it for something sooner or can it stay invested for the long haul and withstand the inevitable ups and downs of the market? We all need to make sure that we think about our short term goals and needs as well as our long term goals and needs. Sure tomorrow is never promised. But you want the ability to make your own choices for years and years.
Can you handle risk? There are two aspects to risk tolerance. The first is your financial ability to survive a loss. If you expect that you will need that money soon, those needs reduce your ability to handle the possibility of a loss. The second is your emotional ability to handle a possible loss. If you are invested in a way that you loose sleep at night, you may want to reduce the amount of risk in your choices. There are plenty of ways to help manage risk such as having an emergency fund or diversifying your investments. It’s just important to consider the possibilities before making your financial choices.
Hopefully, these thoughts will help you contemplate the possibilities as you equip yourself to pursue your financial goals. It will definitely be time well invested.
Author: Amy Jordan is a Wealth Advisor for Indiana Trust and Investment Management Company where she helps clients with their financial planning.
Source: Broadridge Investor Communication Solutions, Inc.