Many investment choices are available. Some guarantee the return of capital with interest after a set time period. Others make no guarantees. This leaves many people unsure about where to invest their retirement savings. Those too concerned with preserving capital see their purchasing power eroded by inflation. Those too concerned with maximizing returns to build [...]

If people have ample savings to cover their needs, they may be able to take additional risk and not substantially affect their financial status. However, if people have limited resources, it might be better to concentrate on less risky investments in order to preserve what they have.

Investors can be labeled as either conservative, moderate, or aggressive depending on the amount of risk they can comfortably handle. The rule: Don’t take on more risk than you can sleep with. Staying awake nights, worrying about their savings is no way to either anticipate or enjoy their retirement.

Time gives people two advantages. If they have time, they can wait out swings in the stock market. And, if they have time, they can often settle for a lower rate of return because the effects of compounding will work more to their favor. Therefore, the time people have before they need to spend their [...]

Consider the importance of stability of principal, predictability of income, and capital growth. These must be considered against the risk and reward potential of the three categories of investment alternatives. To have maximum stability of principal, people could invest in cash equivalents. However, their income would be unpredictable due to the variation in short-term interest [...]

Four factors should be considered when deciding on their investment strategy. Here are a few thoughts on each.

There is no other source with the potential to contribute as much to their savings as compound interest—not people, nor their employer. But to get maximum benefit, they need to start early. For example, if they want to have a million dollars when they retire at age 60, they should calculate the savings they need [...]

There is no other source with the potential to contribute as much to their savings as compound interest—not people, nor their employer. But to get maximum benefit, they need to start early. For example, if they want to have a million dollars when they retire at age 60, they should calculate the savings they need [...]

Diversification is the best way to moderate risk. It is done on two levels. The first is asset allocation—spreading their savings among three basic categories: cash equivalents, income investments, and growth investments. The portion of their total investment in each category depends on their savings goal and the time available. Asset allocation will help moderate [...]

Any investment strategy has some risk. Even if people put their savings in a safe deposit box, people will lose as inflation erodes its purchasing power. To earn a positive net rate of return, people need to take some risk. There are four types of risk to plan in developing the savings strategy:  Market [...]