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Managing investments

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Create a brief investment strategy. Set a monetary goal, it could be a million dollars or some other dollar amount. Make the investment plan by considering the income level, age, and potential career growth. Please use the following info:
- Annual income: 60K.
- Age: 35.
- Potential career growth: To own and operate several group homes for children with developmental disabilities; To purchase several houses for the children to live, and the government will pay a daily rate for room, meal, and habilitations.

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Managing investments is a very serious matter, which can lead either to huge profits or to huge losses. One should invest so that your money grows and shields you against rising inflation. The rate of return on investments should be greater than the rate of inflation, leaving you with a nice surplus over a period of time. Whether your money is invested in stocks, bonds, mutual funds or certificates of deposit (CD), the end result is to create wealth for retirement, marriage, college fees, vacations, better standard of living or to just pass on the money to the next generation.

Factors for the choice of asset allocation

The amount that you invest will eventually depend on factors such as:

Your risk profile

Your Time horizon

Savings made

The investment options before you are many. Pick the right investment tool based on the risk profile, circumstance, time zone available etc. If you feel market volatility is something which you can live with then buy stocks. If you do not want to risk the volatility and simply desire some income, then you should consider fixed income securities. However, remember that risk and returns are directly proportional to each other. Higher the risk, higher the returns.

Begin with an understanding of yourself.

What do you want from your investments?
It could be growth, income or both.

How comfortable are you to take risks?

Planning and Setting Goals: Investment requires a lot of planning. Decide on your basic framework of investments and chart your risk profile.

Ask yourself: What is the investment "time ...

Solution Summary

Managing investments is overviewed in the following posting. Concepts covered include monetary goals, investment plans and career growth.