Answers To The 3 Most Common Questions We Get Asked

/

  • Question 1: How Much Should I Be Investing?

    • Answer: There is no “one-size-fits-all” amount to invest. For instance, the flexibility to invest more of your income looks vastly different for someone who has a mortgage and several kids versus someone with no major financial responsibilities. It comes down to assessing your current financial situation and trying to optimize your budget. Keep in mind that as your career progresses and you periodically earn more, revisit your investment capabilities to see if you can increase your investment contributions.

  • Question 2: How Much Should I Earn?

    • Answer: There is no single benchmark that all investment accounts should be achieving. Certain market indexes (i.e., S&P 500, Dow Jones) help reflect how the overall stock market is performing, but refrain from using their respective performances to gauge your portfolio success. Instead, your portfolio returns should match your specific profile. Factors such as your current finances, goals, risk tolerance, and investment timeline should drive your portfolio make-up in pursuit of balancing the investment returns you seek with the investment risk required to achieve those returns.

      • Finding the correct risk versus return balance goes beyond your age, too. Just because you are in your 20’s does not necessitate taking an extensive amount of risk. Conversely, just because you are approaching retirement does not mean you should be ultra-conservative. How much your portfolio should earn stems from other factors as well. A comprehensive assessment of your financial situation will help you pinpoint a personalized investment return goal.

  • Question 3: What Should I Invest In?

    • Answer: It would be a disservice to make specific recommendations without knowing some necessary information about the investor in question. However, as it relates to our firm and how we manage portfolios for clients, we predominantly invest in exchange-traded funds (ETFs). ETFs are similar to mutual funds by offering a way to diversify, except they are more efficient. Compared to the typical mutual fund, ETFs are cheaper to own and are easier to buy/sell. There is a universe of ETFs to choose from, providing a buffet of options that will satisfy most investors.

I hope you enjoyed reading!

Joshua J. Baird
Investment Adviser Representative