| The best investment strategy for most people is | | | | and you will benefit when interest rates are stable |
| to KEEP IT SIMPLE. Don't complicate things when | | | | or falling. When interest rates rise expect losses in |
| investing money or you'll likely feel uncomfortable | | | | any bond investment. Money market funds, on |
| and lose interest. Here we offer a simple solution | | | | the other hand, benefit when rates go up and |
| for both choosing investment options and asset | | | | rarely (if ever) fluctuate in value. |
| allocation. | | | | If you want higher safety put more money in |
| The best investment options for most people | | | | your money market fund than in your bond fund. |
| who want simplicity: index funds. You don't need | | | | For greater income in this safer half of your |
| to worry about fund performance since these are | | | | portfolio, invest more in your bond fund. |
| mutual funds that track a stock or bond index. | | | | Otherwise just go with our original asset allocation |
| Plus, the cost of investing money is low if you go | | | | above. |
| with a major no-load fund company. | | | | Now, you know how to set things up. But to |
| The other half of the investment strategy | | | | have a complete investment strategy you need |
| equation is called asset allocation. To keep it real | | | | to manage things over time. We'll keep this simple |
| simple, you will be investing in three different | | | | as well. |
| types of mutual funds: stock index funds, bond | | | | Don't let your allocation numbers get out of line as |
| index funds and money market funds. How much | | | | time goes by. If you started investing money |
| (what percent of your total investment assets) | | | | with 50% in stock index funds and the other half |
| should you invest in each? | | | | evenly split as suggested ... keep it that way. At |
| Best investment strategy for most people: 50% | | | | least once a year review your progress and your |
| to stock index funds and the rest split evenly | | | | percentages. Move money around when |
| between bond index funds and money market | | | | necessary. |
| funds. Investing money with this asset allocation | | | | For example, you see that your stock fund |
| puts half of your money at risk in an attempt to | | | | accounts for only 45% of your total vs. your |
| make greater profits. The other half is safer and | | | | original allocation of 50%. Move money from your |
| pays interest in the form of dividends. | | | | other two investment options to get back on |
| Your bond fund will generally pay more interest, | | | | track. |