Be a Smart Investor

With a little common sense and these five rules, you can succeed in achieving all your investment goals.

Define Your Goals

You have more than one kind of goal (retirement, education, etc). You need more than one type of investment.

• For immediate access to your money, try a More Money Account that earns far more than savings, keeps principal safe, and allows penalty-free withdrawals.
• For needs one to five years away, consider our ASI-insuredCDs for a higher guaranteed yield.
• For goals more than 5 years away, consider a combination of stock funds and bond funds for growth that beats inflation.

Make a Plan

Decide how much to invest, what percent to put into each investment category based on your goals and tolerance for risk. For example, a classic mix for retirement is 60% stocks and 40% bonds. Each goal requires a different mix. A certified financial planner can help you determine what that mix should be.

Balance Your Portfolio

Let’s say you start off with the classic retirement mix, but stocks soar that year. You could wind up with 65% stocks and 35% bonds. To readjust to the original 60%/40% game plan you’ll need to transfer money from stocks to bonds at the end of the year. Maintaining a consistent balance helps you stay on course.

Avoid Investment Fees

Investment fees vary greatly by brokerage house and by fund. So shop and compare. Place your investments through a broker that does and charges the minimum, unless you feel you want more guidance. When buying funds, look for “no-load” funds to avoid sales fees up front and when you sell.

Simplify Your Strategy

You don’t need more than five funds (big U.S. stocks, small U.S. stocks, international stocks, total bond index, money market) to be well diversified. Avoid investments that are beyond your expertise, like commodities. And never ever invest in anything someone pitches you over the phone!