Take These Four Steps Before You Invest
Everyone should lay some groundwork before they start investing. The first thing to consider is your debt status. Do you have any high interest loans you are paying off? Keep in mind that if you own a home or apartment it might not always be wise to pay off your mortgage because of tax deductions
This is a good place to start, but you will eventually want to look at further diversifying with international stock fund, alternative funds and even bond funds. If your retirement plan or brokerage offers target-date funds, this is one way to get the right balance. These funds base their allocation (mix of stocks and bonds) for your target retirement age and automatically shift the allocation as you get closer to your retirement date.
The last thing to think about before investing is what to actually invest in. There is a great strategy based on the “lazy investor”. You will find plenty of portfolios earning above 8% a year if you g
oogle lazy investor. It’s all about finding the portfolio that meets your financial needs. You don’t want to take on more risk than you have to.
About Shaun Archer Tatum Shaun works in corporate finance in New York City. He has done financial consulting for several start-ups and has worked at several Fortune 500 companies. He has contributed several finance/investing articles on Seeking Alpha which have been published on Yahoo! Finance.