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Back to basics

Jeffrey Apps and Tracy Tutag

Last week’s column about investor types addressed a fundamental concept of investing and prompted several questions regarding the basic elements of a sound investment portfolio. Perhaps the greatest contributor to long-term investment success is a clear vision of the type of lifestyle you’d like to have when you retire. We often refer to ‘retirement’ as ‘financial freedom’ or choosing to work because you want to, not because you have to. In any case, a specific set of financial goals will allow you to better create an investment portfolio that is designed to help accomplish each of your objectives, one that fits your investment time horizon and your tolerance for risk. Whether your goals include a comfortable retirement, a college education for your children or grandchildren, a solid estate plan for your property and assets, insurance protections for your family’s future or a long-term care insurance plan for you or your parents, a well thought out and constructed portfolio is vital to your success.Commitment is keyThe first step in creating a sound investment portfolio is developing a list of financial goals and putting them in writing. Listing your goals creates a solid foundation for developing a plan and allows you to visualize the results you wish to achieve. Focus on putting all of your goals, large and small, on your list. By compiling the most complete list possible, you’ll make the task of prioritizing your needs and desires much easier. Take time to think about what your priorities are and what is most important for you and your family. You may only have limited financial resources, so invest the time and focus on what would make the most sense to you.Once you’ve established a prioritized list, begin to think about modest changes you can make in your day-to-day living that will assist you in reaching each goal. Small adjustments today could make a big difference down the road. Starting a retirement program or increasing contributions to your company’s investment plan at work are small steps that could reap big benefits in the future. Committing to saving an extra $50 to $100 a month could create a substantial difference in the amount of money you have when it comes time to retire or pay for your child’s education. Your long-term success will be decided as much by your determination and commitment to your plan as it will be by the types and amount of investments you make. So, make a plan and stick to it.Changing lifestylePerhaps the second most important characteristic of any investment portfolio is flexibility. A plan that suits all of your needs today might not fit your needs in the future. Any portfolio you build today, including investments such as stocks, bonds, mutual funds, IRA accounts, insurance and other vehicles, must have some flexibility within it to adapt as your needs and lifestyle changes. Professional advice can go a long way in helping you clarify your financial goals and then to help guide your portfolio’s design and maintain it over the long-term. Periodically reviewing and adjusting your portfolio is one key to your ongoing success. Although the basic principles of a sound investment plan are plain common sense, working with a dedicated financial advisor can help you make the most of your plan and help you reach your financial goals. Jeffrey Apps & Tracy Tutag offer securities and investment advisory services through AXA Advisors, LLC (member NASD, SIPC) 1290 Avenue of the Americas, New York, NY 212-314-4600 and offers annuity and insurance products through an insurance brokerage affiliate, AXA Network, LLC and its subsidiaries. They can be reached at 926.0601 or tracy.tutag@axa-advisors.comVail Colorado


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