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Green Peak Advisors

Investing 101 – Where do I begin?

“Don’t work for money, have your money work for you!”

Many of you are familiar with the famous catch phrase – “Don’t work for money, have your money work for you!” This sounds nice, but what does it really mean? How do I get going? What are the basics?

Some of you may even have thousands of dollars just sitting in a cash account, recently received as a gift, a bonus, or an inheritance, and the funds are literally sitting and earning nothing. In fact, cash sitting idle is actually losing value due to inflation!

Perhaps you cashed out of some stock options you held in your in your company…and now you are “flush” with cash (cue the Parks and Recs reference and shout out to Jean Ralphio!).

But what is the first step? How do I create a manageable portfolio that is positioned correctly so that I can achieve my financial goals?
This is a bit of a loaded question. The proper process would be:

I encourage you to, create a tailor-made solution and not to just take advice from the internet (which we see so much now).

Is there a simpler way? Or at least a short-cut? Do I really need to go through this entire process?  The answer is 100% yes!

If you dabble here and there and start investing without a strategy, you will not achieve your financial goals.

I honestly believe that one should go through this process, with or without expert advice.  I will discuss in another post the benefits of working with a professional and why it is worth every Shekel.

How should I approach investing?

In my opinion, there are two important criteria that you should consider beforehand:

(1) Time horizon for the funds
(2) One’s risk appetite

If the funds are needed within the next few years, your investment options are limited and you should consider a very conservative investment approach (if any at all). If the funds are to be socked away for the long-term (say, 10+ years), then you should develop an appropriate investment strategy based on your risk profile and goals.

Here are my 4 basic investment principles:

1. Global Diversification
2. Multi-asset investing
3. Sticking to an asset allocation model with a target return
4. Disciplined investing – not letting “gut” or “a hunch” or other behaviors get in the way

Talk to the experts at Green Peak Advisors about adopting a holistic approach to your financial planning and investments– contact us today!