Mutual Fund Planning

Mutual funds, as with other investments, are affected by changes in economic trends and cycles. The value of investments may rise or fall as the stock and bond markets fluctuate. Understanding certain investment concepts and tactics can help you lessen risk and maximize opportunity.

Mutual Fund

INVESTMENT CONCEPTS

INFLATION: Inflation is an increase in the volume of money and credit relative to available goods and services, resulting in a continuing rise in the general price level. Over time, inflation reduces the value and purchasing power of money.

RISK VERSUS REWARD: Generally, the greater the amount of risk assumed by an investor is, the greater the potential rewards are. Before you make any investment decisions, you should know your risk tolerance. Factors such as age, income and years until retirement, should be considered before making ANY investment decision.

MARKET FLUCTUATIONS: Upswings or downturns in market activity impact the value of investment instruments or accounts. As a result, investments may be worth more or less than their original cost when ultimately redeemed.

ASSET ALLOCATION: Asset allocation is the process of developing a diversified portfolio by mixing different asset classes - such as stocks, bonds and cash equivalents - in varying proportions to help reduce risk and maximize potential return.

DIVERSIFICATION: An investment portfolio that contains a number of different types of investments tends to have a lower level of risk than a portfolio with more similar types of investments. There is no assurance that a diversified portfolio will achieve a greater return than a non-diversified portfolio.

DOLLAR-COST AVERAGING: Dollar-cost averaging advocates the investment of a constant dollar amount, regardless of the price of the investment. Over a period of time, this generally results in a lower purchase price per investment than if the total purchase was made at one time.

COMPOUNDING: Compounding takes place when the returns (such as interest, dividends and capital gains) on investments start earning returns of their own.

Financial Wellness

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