Welcome back to the Money Wisdom Question Series! Today’s hot topic: “Are your investments the right fit for you?” Join us as Jake Doser, CFP®, CPWA® shares insights to help you evaluate your portfolio.

Assessing Your Investments

When it comes to ensuring your investments are aligned with your goals, you want to ask yourself a few questions to evaluate their suitability. Here are some key points to consider:

1. Are My Investments Serving Their Intended Purpose?

Every investment decision should start with the end in mind. This means knowing exactly what you want to achieve with your money. For example, if your goal is to invest for a retirement that’s decades away, you should focus on growth. If you haven’t clearly defined your purpose or vision for your money, it’s time to start planning. Ask yourself:

• When do I intend to retire?
• What do I want my retirement to look like?
• What are my financial goals?

If your goal isn’t retirement, identify what your purpose is. This understanding will guide you in choosing whether to pursue growth, safety, or income generation.

2. When Do I Intend to Use This Money?

Timing is crucial. The sooner you need to access your money, the more conservative your investments should be. Conversely, if your time horizon is long, you can afford to take on more risk in pursuit of higher returns. Remember:

• Short-term goals require safer, more conservative investments.
• Long-term goals allow for higher risk and potentially higher returns due to the time available for recovery.

3. How Are My Assets Balanced?

Consider the type of assets you’re investing in and how they fit within your overall financial strategy. For instance, if you’re heavily focused on retirement savings but lack an emergency fund, you might be setting yourself up for trouble. Emergencies can occur unexpectedly and may require immediate access to funds. Additionally, if you have high-interest debt, such as credit card debt, prioritizing investment over debt repayment might not make sense. Investments typically can’t outpace the high interest rates of such debts.

Building a Plan

The core of these questions revolves around having a solid plan. Your investment strategy should be built based on:

• Your lifestyle and goals
• When you intend to use the money
• How different assets complement each other

By focusing on these elements, you’ll be better prepared to make informed decisions about which investments are right for you.

In conclusion, understanding your purpose, timing, and asset balance are fundamental to creating a successful investment plan. With these questions in mind, you’ll be well on your way to making investments that align with your financial goals.