Guide for managing your investments

Whether you’re managing your investments yourself or through an investment broker, it’s important to understand investment basics to make the most of your money. If you’re new to investing the process can seem a bit overwhelming; but getting started with an investment strategy can be fun. 

Here’s some guidance to help you get started managing your investments today. 

  1. Understand investment products – It’s important to do a bit of research about the different investment products available. This will allow you to make informed decisions about which products meet your needs. Whether you're interested in stocks, options, bonds, or funds, each comes with its own set of risks and rewards.

  2. Determine your risk level – Investing is different from straight cash savings in that it comes with an inherent level of risk. The risk level tends to be proportionate to the growth potential of the account. This means that riskier products have the potential to grow more rapidly and build more wealth. They also have a greater potential to lose value. So carefully consider your acceptable risk level before determining your investment strategy. 

  3. Understand asset allocation – This is a strategy of investing that considers your acceptable risk level, investment goals, and timeline to create a diverse portfolio. Which assets you select (stocks, bonds, cash accounts, etc.) can help determine your growth potential. Asset allocation tends to have more bearing on growth potential than does individual product selection. In other words, whether you put 50% of your money in stocks vs bonds has a bigger impact than which stocks or bonds you pick. Take the time to work out your desired asset allocation strategy before you start investing. 

  4. Diversify your strategy – Part of asset allocation is diversifying your selection of investment vehicles. In short, don’t put all your eggs in one basket. Spreading your risk across different types of products will minimize fallout if there are market fluctuations (and there will be) and has been shown to improve performance in the long run.

  5. Don’t settle for confusion – Make sure you understand what is going on with your investment portfolio. If you are working with a broker, pay attention to all the conversations. If you don’t understand something, don’t be afraid to ask for clarification. This is your money, it’s important to make sure you are fully aware of the strategies and decisions being made. 

  6. Pay attention – Once you have communicated your strategy to a broker and purchased your investment products, you may be tempted to relax a bit. But don’t get too complacent. It’s important to pay attention to all statements and communications regarding your investments. If you have any questions about what you see on the statements, reach out to your broker sooner rather than later. 

  7. Be patient – It can be scary to see investments losing value and you may be tempted to pull out at the first sign of trouble. Try not to be too reactive. If you have worked through your acceptable risk level, asset allocation, and have appropriately diversified your portfolio, there is no reason to panic over a little fluctuation. In fact, more frequent trading can end up racking up brokerage fees. When in doubt, discuss your concerns with a knowledgeable professional before reacting to an asset’s valuation change. 

Investing is an important tool for building wealth and designing a healthy retirement plan. It doesn’t have to be intimidating. Follow this checklist to make sure you are prepared for starting your investment journey. 

Hallmark Capital Management
Asset Management

Hallmark Capital Management

When it comes to your investments, are you making the best decisions to help you reach your personal financial goals? Our Registered Investment Advisor manages assets through direct investment in common stocks and individual bonds.

You may also be interested in 

hidden text to fill headerThinking about saving for retirement?


Choose how you retire with a Valley IRA savings account.

Traditional IRA or a Roth IRA?
hidden text to fill headerWhich is better for me?

Traditional IRA or a Roth IRA?

Which is better, a Traditional IRA or a Roth IRA? Traditional IRAs offer tax-deferred earnings and tax-deductible contributions. Roth IRAs offer tax-free earnings, but contributions are not deductible.

How to protect yourself when investing
hidden text to fill headerpositive return while protecting yourself

How to protect yourself when investing

Responsible investing can be a great way to build wealth and achieve your financial goals. But how do you protect yourself when investing?