Page 4 - Hobe Sound Reflections - September '24

Page 4, Hobe Sound

Financial Focus ®

Know The Risks Of Investing prices are down. One way to help defend against this volatility bonds. When you’re saving for a short-term goal, such as a
down payment on a house, a wedding or a long vacation, you
is to hold stocks for the long term, rather than constantly buying
– And Not Investing and selling, and to own a mix of stocks from different industries want the money to be there when you need it, so an investment
and even different countries. that offers protection of principal may be appropriate, even if it
By Sally Sima Stahl • Bonds – When market interest rates rise, the value of your doesn’t provide much in the way of growth.
Investing involves risk bonds can decline because investors won’t pay full price for For those long-term goals, though, you may need to build
— and so does not investing. them when they can get the newer ones that offer higher rates. an investment portfolio that contains growth potential and that
You should know how both Another type of risk associated with bonds is credit risk, which reflects your personal risk tolerance and time horizon. Over time,
these types of risk can affect essentially describes the risk that the bond issuer may default, your risk tolerance may change. As you get closer to retirement,
your ability to reach your potentially disrupting your flow of interest payments. However, you may want to take a somewhat more conservative approach
financial goals. you can help mitigate this risk by purchasing investment-grade — but you’ll always need some elements of growth.
Let’s start with the risks bonds that receive the highest credit ratings from independent When you invest, risk can’t be eliminated, but it can
associated with investing. rating agencies. be managed. Keeping this in mind, consider a long-term
There’s not a single investment • Certificates of deposit (CDs) – Although CDs are generally investment strategy that allows for risk but also offers the
risk because different types considered safe because their principal is guaranteed, they do possibility of reward.
of investments carry different carry reinvestment risk — the risk that you won’t be able to This article was written by Edward Jones for use by your
types of risk. Here’s a look at three investment categories and reinvest the proceeds of a maturing CD at the same interest rate. local Edward Jones Financial Advisor, Edward Jones, Member
some of the risks connected with them: To help protect against this risk, you could own CDs of varying SIPC.
• Stocks – When you invest in stocks or stock-based mutual maturities. When market rates are low, you’ll still have your Edward Jones is a licensed insurance producer in all states
funds, you will incur the risk that the value of your investments longer-term CDs paying higher interest, and when market rates and Washington, D.C., through Edward D. Jones & Co., L.P.,
may decline. Stock prices can fall for any number of reasons – rise, you can reinvest the money from your maturing shorter-term and in California, New Mexico, and Massachusetts through
lower-than-expected earnings, a change in management, change CDs into the new, higher-paying ones. Edward Jones Insurance Agency of California, L.L.C.; Edward
in consumer tastes, and so on. Although the historical trend for Now, let’s turn to a completely different type of risk — the risk Jones Insurance Agency of New Mexico, L.L.C.; and Edward
stocks has been positive, there will always be periods when of not investing. And this risk is easy to understand: If you don’t Jones Insurance Agency of Massachusetts, L.L.C.
invest, or if you consistently invest only in the most conservative Edward Jones, its employees, and financial advisors cannot
vehicles, your money may not grow enough to allow you to reach provide tax advice. You should consult your qualified tax advisor
Heroes Vs. Villains from page 1 your important long-term goals, such as a comfortable retirement. regarding your situation.
®
Of course, this doesn’t mean you should never own Contact us at (561) 748-7600, Sally Sima Stahl, CFP ,
brought out the creativity conservative investments, including CDs and some types of AAMS , 1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.
™
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Teenage Mutant Ninja Turtles featuring Alyssa Bean,
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Ashley Soures, Paula Newmaster, Renee Barnett, Kateline
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