We often hear questions about how much money a person should put in equities. The answer is different for every person, of course. And the reasons are manifold. But there are some general rules of the road.
First, have you taken care of your short-term financial stuff?
- Do you have enough money tucked away for emergencies?
- What if you lost your job?
- What if you have a health problem?
You want to set aside this money and don’t put it in equities. Today, interest rates are low! You have to make a decision to not worry about the rate of return on this safe money.
Second, diversify. You may want to talk with an expert about where to invest your money and how much to put into each. This is called asset allocation. Click here to learn how we make these decisions.
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