Whether you are new millennials or working adults reaching retirement age, you must financially plan and learn about the stock market. The process involves setting realistic goals and selecting the right insurance and investment products, especially if you are a beginner or a small business owner. Organizations and government agencies recommend investors rely on the expertise of licensed financial advisors and certified public accountants. These professionals help future retirees and investors plan efficiently for long-term or short-term investment strategies. What every investor must first comprehend is that risks and the stock market have an influence on profitability and growth.
Harlow Wealth Management, for a prime example, offers services for retirement, tax, social security, and financial planning. Each service is essential for creating a safe investment portfolio comprising diverse products available on the stock market with the lowest risks. Tools and guidance are available to help you plan and save for early or future retirement. Keep in mind that the main goals are to maximize your funds and investments, minimize taxes, and protect your assets. Wealth management tools, guidance, and stock market information help investors and entrepreneurs reach their desired goals by selecting the right investment options and to build a successful portfolio.
Stock market information with investment guidance is a beginner’s safe-haven for protecting investments in stocks, bonds, annuities, and commodities. For an instant, some investors were disappointed in the market in December 2018 when Dow Industrials and S&P 500 fell by nine percent. They were nervous while the federal reserve was considering raising the interest rate after the US and global markets took a dive. An article reported on February 4th, 2019 that the last month of 2018 was the worst December since 1931. January 2019 brought the new year in with good news for investors when S&P rose to 7.8 percent, which is the best January since 1987.
The stock market event in January 2018 placed investors at ease whereas the market in December had them nervous and curious about a hike in the interest rate. Investing is all about earnings and interest rates. The reason the federal reserves didn’t raise the rate is because the rise in S&P caused volatility to increase and the market didn’t show inflation. Economic events cause different reactions of an investor when national and global markets are up or down. When the market is up, a financial advisor may give advice to purchase a particular investment product.
What Impact Risks Have on Investment Options
On the US stock market, there are no 100 percent risk-free and safe investment products in any of the options. Each product has its own level of risk, uncertainty, and possible loss when investors invest. They may choose an option that pays higher returns on their invested capital when a particular strategy has high risks. The results of taking on a risk in all investments can be rewarding by receiving capital gains or it can devastate by losing everything. Let’s look briefly at four risks that influence stock and bond options.
- Company Performance Risk
Stocks and bonds come with the business risk of common and preferred stockholders losing invested capital if a company files for bankruptcy and assets are liquidated. When investors buy stock in a business, they are buying a part of its ownership. Bondholders are the first in line for payment and the stockholders receive the remaining balance or nothing if that’s the case.
- Market Volatility Risk
The market has the tendency of fluctuating which causes stock prices to go up and down. Economic, market and/or political events may cause it.
- Interest Rate Risk
The value of a bond decreases if a holder cashes before it matures. The risk involved is losing its face value, and the interest promised on the bond.
- Inflation Risk
The risk of inflation impacts investors’ purchasing power if they receive income with a fixed rate.
The SEC or Securities & Exchange Commission has more information about the variety of risks prospective investors should know when selecting investment options. All investments have risks that impact returns, interest rates, and earned income. Knowing this, guidance for planning financial wealth and future retirement is a necessity to safeguard your assets and investments.