Developing a Personal Investment Policy

A personal investment policy is like a road map to help an investor define his/her financial goals. Simply put, it’s a plan to allocate assets among various investment choices such as stocks, bonds, money market and other cash equivalents.

Investment planning should incorporate the following process:

• Determine a retirement income goal and how much time is available to reach it;
  
• Allocate money among different asset classes; and
  
• Diversify within each asset class.

It is important to remember that the level of market risk that can be tolerated will change over time. As an investor moves closer to retirement, he or she may not be able to endure short-term investment volatility. Investors should carefully evaluate their personal investment policy as they approach retirement. A prudent decision may be to reduce the amount allocated to stocks so as to protect accumulated assets.

Remember to take advantage of the retirement planning tools and services available. It’s a great way to get the help you may need to develop a personal investment policy, invest effectively, and retire with the lifestyle you desire.