From Eveningsnews.com
Investing for the future
By
Dec 5, 2007, 22:18
(NC)-Everyone has goals and it is important not to lose sight of them. Some are short-term, such as buying a new car. Some are longer-term, such as paying off your mortgage, or saving for a comfortable retirement.
It may seem difficult to work towards your goals while managing your day-to-day finances, but it can be easier than you expect.
Many banks have tools that you can leverage like the CIBC Financial HealthCheck that can help you determine where you are financially, where you want to be, and how to get there.
Here are 6 investing principles that you should consider before investing:
1. Know yourself. To better understand yourself as an investor, consider your risk tolerance, investment knowledge, investment objectives, gross annual income, approximate net worth and investment time horizons.
2. Get an early start. Taking advantage of the effects of "compounding" is one of the best ways to make your money work for you. Compounding is money multiplying itself by earning a return on the return
3. Invest regularly. It's generally much easier to come up with a smaller amount to invest on a monthly or weekly basis than to make a large, lump-sum contribution. Look into options like lines of credit and loans when you need extra funds for investment purposes a practice most commonly followed during RRSP season.
4. Build a diversified portfolio. Spreading your assets across a wide range of investments is an effective way to reduce risk and increase potential returns over the long term. Holding a mixture of different types of investments will help cushion your portfolio from downturns, as the value of some investments may go up while the value of others may go down.
5. Monitor your portfolio. Monitor your portfolio so that it continues to meet your needs. Market conditions, life events (marriage, children and retirement) and changing goals are cues to review your portfolio.
6. Align your investments with your time horizons. The type of investments you choose will depend on whether you're saving for long-term or short-term goals. For your long-term goals, you may want to consider long-term, growth-oriented investments. Your short-term goals call for investments that are more conservative, and more accessible. For example, if you're investing to save for a downpayment on a home, you'll want quick and easy access to your funds.
For more information on CIBC's Financial HealthCheck visit your local CIBC branch, call 1 800 465- CIBC (2422) or visit www.cibc.com.
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