Author: The Brand Office

Top Investing Questions in 2024 Answered

5 August 2024
The Brand Office
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Categories: Financial Literacy, Investing

Wondering about the top investing questions in 2024? You’re in the right place. This guide tackles the most pressing questions investors have this year. From deciding how much to invest to choosing the best investment options and understanding the risks involved, we’ll provide straightforward answers to help you navigate the investing landscape in 2024.

Key Takeaways

  • Experts recommend investing 10-20% of your income, prioritizing an emergency fund before starting and using frameworks like the 50/30/20 rule for financial planning.
  • A diversified investment portfolio in 2024 should include options like S&P 500 index funds, dividend stock funds, REIT index funds, and a mix of small-cap and value stock funds.
  • Balancing paying off high-interest debt with investing can optimize financial growth, prioritizing higher-interest debt repayment while not completely missing out on investment opportunities.

How Much Should I Be Investing?

Determining how much to invest can seem like a daunting challenge, but it doesn’t have to be. The golden rule is to start as early as possible because, as the adage goes, time in the market is more valuable than trying to time the market. Generally speaking, experts recommend investing around 10-20% of your income. This might seem like a lot, but remember, starting small and increasing your contributions over time is perfectly fine.

Before you decide on a specific amount, take a hard look at your financial situation. Consider your taxed income, debts, emergency fund, and daily living expenses. Before you start investing, having an emergency fund in place is vital, as this safety net will protect you from unexpected expenses. The 50/30/20 rule can be a helpful guideline: allocate 50% of your income to necessities, 30% to discretionary spending, and 20% to investments and savings, including a savings account.

Setting clear, attainable investment goals will also guide you in determining how much to invest. Whether you’re saving for retirement, a down payment on a house, or your children’s education, having specific targets can provide the motivation you need to stay committed. Remember, the goal is to invest as much as you can comfortably afford without jeopardizing your financial stability.

What Are the Best Investment Options Available Today?

In 2024, the investment landscape offers a plethora of opportunities to suit various risk tolerances and financial goals. One of the most popular options is the S&P 500 index funds, which provide exposure to about 500 of the largest American companies and are an excellent choice for beginning investors. For those willing to deal with significant volatility, Nasdaq-100 index funds focus on the largest tech companies and can offer substantial returns.

Dividend stock funds are another attractive option, especially for those looking for income from their investments. These funds pay out quarterly dividends, making them beneficial for stock investors seeking regular income. Additionally, REIT index funds offer diversified exposure to real estate, allowing you to benefit from the real estate market without the headaches of managing property. 

For long-term investors, small-cap stock funds and value stock funds are worth considering. Small-cap funds invest in small companies with strong growth prospects, while value stock funds target bargain-priced stocks and can be suitable for investors comfortable with volatility. Regardless of your choice, ensuring your investment portfolio is diversified across different asset classes can help mitigate risks and enhance returns.

Is It Better to Pay Off Debt or Start Investing?

One of the central questions in personal finance is whether to focus on paying off debt or start investing. The answer often lies in interest rates. Generally, paying off high-interest debt provides better returns than most investments. Starting with the highest interest rate debt ensures faster debt elimination. 

However, if the potential return on your investments is higher than the interest rates on your debt, it might make sense to split your efforts. Balancing both paying down debt and investing is often a recommended strategy because it allows you to make progress on both fronts. This way, you’re not missing out on investment opportunities while you work on becoming debt-free.

Ultimately, the decision should align with your financial goals and risk tolerance. Consider how much risk you’re willing to take and whether the peace of mind from being debt-free outweighs the potential returns from investing. It’s a personal decision, but with careful planning, you can strike the right balance that works for your financial situation.

How Do I Build a Diversified Portfolio?

Building a diversified portfolio is a cornerstone of a robust investment strategy. Diversification means spreading your investments across various asset classes, sectors, and geographic regions to lower your risk. The idea is to avoid putting all your eggs in one basket, thereby reducing the impact of any single investment’s poor performance on your overall portfolio.

A well-diversified portfolio should contain a combination of:

  • Domestic and international stocks
  • Small-, mid-, and large-cap companies
  • Investments across different sectors
  • Geographic diversification

This balanced investment approach helps protect your portfolio from industry-specific downturns and mitigates risks related to political or economic instability in a particular region.

For many investors, mutual funds, index funds, and exchange traded funds are simple ways to achieve diversification. These funds often include a variety of companies and holdings, making it easier to spread your investments without having to manage multiple individual assets. By diversifying, you can optimize your asset allocation and reduce the overall risk in your investment portfolio.

What Are the Costs Associated with Investing?

Investing isn’t free, and understanding the costs involved is crucial for maximizing your returns. Fees commonly charged to investors include:

  • Trade commissions
  • Operating expense ratios
  • Transaction fees
  • Portfolio management fees

These can quickly add up and eat into your profits if you’re not careful.

Expense ratios are fees charged by mutual funds and are calculated annually, directly taken from the fund’s assets. Additionally, you might encounter account maintenance fees, which are annual or monthly charges for using brokerage firms and their tools. Being aware of these costs and opting for low-cost alternatives whenever possible is crucial.

Another type of fee is the advisory fee, a percentage of assets managed, charged by brokers for providing wealth strategies and advice. While actively managed funds typically have higher fees, passively managed funds, like those replicating market indexes, generally have lower expense ratios. By opting for no-fee brokers and low-cost index funds, you can avoid many unnecessary fees and keep more of your money working for you.

How Can I Assess the Performance of My Investments?

To ensure you’re on the right track to meet your financial goals, you must assess the performance of your investments. One of the most common methods is calculating the Return on Investment (ROI), which measures the profitability of an investment by comparing the gain or loss to its cost. The formula for ROI is straightforward: subtract the initial cost of the investment from its final value, divide by the cost of the investment, and multiply by 100.

For a more accurate measure over time, consider the annualized ROI, which accounts for the length of time the investment is held. For the math or do-it-yourselfer enthusiasts out here, this can be calculated using the formula: [(1+ROI)^(1/n)-1]*100, where n is the number of years the investment is held. Regularly assessing your ROI helps you understand whether your investments are performing as expected and meeting your financial objectives.

Another critical aspect is monitoring your asset allocation and rebalancing your portfolio as needed. Market changes can cause your asset mix to drift from your target allocation, hence the need to periodically review and adjust your investments. This ensures that your portfolio remains aligned with your risk tolerance and investment philosophy.

What Role Does a Financial Advisor Play?

A financial advisor, also known as a financial consultant or financial planner, can be a valuable asset in your investing journey, offering personalized advice tailored to your financial situation and goals. Traditional financial advisors are ideal for:

  • in-person financial planning
  • complex situations
  • guidance on building a diversified portfolio
  • setting financial objectives
  • navigating complex financial scenarios

Fiduciary financial advisors are particularly beneficial because they are required to act in the best interest of their clients, recommending only the best-fit investments. When selecting a financial advisor, considering if their typical clients align with your situation and goals is imperative. This alignment ensures that the advice you receive is relevant and tailored to your needs, especially when dealing with financial institutions.

Online financial planning services are also an option for those seeking personalized advice without the need for in-person meetings. These services can provide a convenient and cost-effective way to access financial expertise. Regardless of the type of advisor you choose, asking key questions and understanding their approach will help you make an informed decision that aligns with your financial plan.

What Are the Risks Involved in Investing?

Investing is always accompanied by risks; understanding these risks is key to making informed decisions. Market risk is the danger of investments declining due to economic developments or other events that affect the entire market. This type of systematic risk cannot be avoided through diversification.

Credit risk involves the possibility that a bond issuer will default on payments, while interest rate risk affects bonds as changes in interest rates can lead to fluctuations in bond prices.

Assessing your risk tolerance involves considering factors like:

  • Time horizon
  • Age
  • Income
  • Personal circumstances

Risk tolerance questionnaires are effective tools for understanding your ability to handle investment risk, including high risk investments.

It’s also important to consider your psychological and emotional risk tolerance towards market fluctuations. Make sure not to invest more than you are willing to lose. By understanding the risks involved and assessing your risk tolerance, you can make more informed decisions that align with your financial goals and investment philosophy.

When Is the Right Time to Sell My Investments?

The knowledge of when to sell your investments holds equal importance to knowing when to buy. Market timing is nearly impossible, even for professional investors, so focusing on time in the market is more beneficial. However, there are certain situations where selling makes sense.

If you need the money in the short term for significant expenses like buying a house or paying for medical bills, it might be wise to sell some investments. Additionally, selling during a market selloff might be necessary if you can’t afford to wait for a recovery. Another common reason to sell is to rebalance your portfolio, especially when one asset class has gone up more than others.

Evaluating the fundamentals of a stock is also crucial. If a company’s fundamentals have deteriorated, such as declining earnings or poor performance relative to industry peers, it might be time to sell. Ultimately, the decision to sell should align with your financial situation and investment philosophy.

How Can I Learn More About Investing?

Investing involves continuous learning, with numerous resources at your disposal to help broaden your knowledge. Objective Measure is a nonprofit organization that teaches basic investment literacy, empowering individuals to become confident and active participants in their investments. They provide access to a financial success roadmap and aim to enrich lives through investment education.

Online courses are another excellent resource. A quick search online will reveal a wide range of topics and tutorials that can bring you to just about any level of investment literacy. The course that Objective Measure has put together (which can be found here: https://classroom.objectivemeasure.org/) is designed to let users move at their own pace from the very basics to the more complex concepts and principles. It also is supported by other resources, tools, and opportunities for engagement that make the education practical. 

Investing in your financial education not only enhances your knowledge but also boosts your confidence in making informed investment decisions.

Summary

Investing in 2024 presents unique opportunities and challenges. By determining how much to invest based on your financial situation, exploring various investment options, and balancing debt repayment with investing, you can create a solid foundation for your financial future. Building a diversified portfolio and understanding the costs associated with investing will help you optimize your returns.

Regularly assessing the performance of your investments and understanding the role of a financial advisor can further enhance your investment strategy. Being aware of the risks involved and knowing when to sell your investments are critical components of successful investing. Finally, continuous learning through resources like Objective Measure and online courses will empower you to make informed decisions.

As you navigate the investing world, remember that the ultimate goal is to enrich your life. Stay committed to your financial objectives, keep learning, and make informed decisions that align with your investment philosophy. Here’s to a prosperous and financially secure future!

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Focus on Fees: The Right Way to Save Money on Your Investments

2 August 2024
The Brand Office
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Categories: Financial Literacy, Financial Management, Investing

Understanding fees in the world of investing is crucial. Fees and expenses can significantly impact your net returns, and being aware of what you’re paying is essential to making informed decisions. Let’s break down what investment fees are, why they matter, and how to consider them in your investment strategy.

What Are Investment Fees?

Investment fees are charges you pay for various services associated with buying, selling, and managing your investments. These fees can take many forms, including:

  1. Management Fees: Often charged by investment funds (like mutual funds and ETFs), these fees cover the cost of managing the fund. They are usually expressed as a percentage of the assets under management (AUM).
  2. Expense Ratios: Another type of management fee found in investment funds, which covers administrative, operating, and other costs. Expense ratios are also expressed as a percentage of AUM.
  3. Trading Fees: These include commissions and transaction fees paid when buying or selling assets. Online brokerages often charge these fees per trade.
  4. Account Fees: Fees for maintaining your investment account, which can include annual maintenance fees, inactivity fees, and account closure fees.

Why Do Fees Matter?

Fees matter because they can erode your investment returns over time. While a 1% fee might not seem significant, it can substantially reduce your net returns over the long term because the power of compound interest is actually working against you. For example, a 1% fee on a $100,000 investment that is growing at 6% annually over 30 years would reduce your ending balance by nearly $60,000.

Reasonable Fees and Management Expenses

Investment fees and expenses are often buried in the fine print, making it essential to know where and how to look, to understand what you’re paying.

  1. Where to Find Fee Information: Fee information is usually detailed in an investment account’s terms and conditions. Pay close attention to the sections labeled “Fees and Expenses” or “Cost Structure” to uncover hidden costs.
  2. Actively managed funds typically come with higher fees that are unavoidable. These fees pay for the professional management of the fund. However, it’s crucial to know what you’re paying and how these fees are impacting your returns. A higher fee doesn’t always equate to better performance, so compare the costs and benefits carefully.
  3. Financial advisors can bring added fees, which don’t always translate to added value. To ensure you’re getting the most out of your advisor, you need to understand the basics and ask the right questions. Be sure to ask about their fee structure, what services they provide, and how those services benefit your financial goals. This knowledge helps justify the expense and ensures you’re not overpaying for advice.
  4. Online brokerages often offer low or no trading fees, making them a cost-effective choice for many investors. However, always read the fine print to avoid hidden costs and ensure that the brokerage aligns with your investment needs.

By understanding where to find fee information and how to evaluate the costs associated with your investments, you can make more informed decisions and keep more of your returns.

Considering Fees in Your Investing Strategy

When assessing your investment strategy, always factor in fees. Here’s how to approach it:

  1. Understand the Fees: Review the fee structures of your investments and ask questions. What are the management fees, trading fees, and any other potential charges?
  2. Compare Costs: Look for lower-cost alternatives that offer similar benefits. Compare similar account and product types that use different fee structures.
  3. Evaluate Value: Higher fees are not always bad if they provide corresponding value. If a high-cost fund consistently outperforms the market, the higher fees might be justified.
  4. Monitor Over Time: Regularly review your investments and the associated fees. Fees can change and staying informed ensures you’re not paying more than necessary.

Active Investing and Fees

Active investing involves regularly monitoring and adjusting your portfolio, which can impact fees and expenses in both directions. However, active participation can also provide greater control over your investment choices and potentially higher returns. Understanding what you own, why you own it, and how much it costs are critical components of an active investment strategy.

Investment fees are an inevitable part of investing but understanding them can help you minimize their impact on your returns. Part of the rules of investing is knowing what you’re paying for, evaluating value, and staying well-informed, to ensure that fees don’t erode your hard-earned gains. Stay connected to your vision of a financially free future and remember that through education you are empowering each next step.

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How to Ride Out Volatility in Investing Without Drowning

2 August 2024
The Brand Office
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Categories: Financial Literacy, Financial Management, Investing

We often hear talk of “volatility” in the world of investing, but we’re not always clear exactly what that means. At Objective Measure, we aim to educate and empower you to confidently participate in your investments; with more knowledge and experience comes increased engagement and success. Volatility is part of this journey, and it’s important to understand what it is, how it affects you as an investor, and what it means for your financial goals.

Understanding Volatility

Volatility refers to the degree of variation in the price of financial products over time. It’s the rate at which the price of an asset, like a stock or bond, increases or decreases. High volatility means the price of an asset can change dramatically in a short period, while low volatility indicates more controlled price changes.

A practical way to understand volatility is to think of it as the market’s mood swings. Just as our emotions can fluctuate based on various factors, so can the prices of financial products based on economic events, company performance, and geopolitical tensions.

Volatility in Stocks and Bonds

Different types of investments experience different levels of volatility.

Stocks represent ownership in a company and their value can be highly volatile. Factors such as earnings reports, changes in management, and industry trends can cause significant price fluctuations. For instance, a tech company might experience high volatility due to innovation cycles and competition, while a utility company might be more stable but still subject to regulatory changes and economic conditions.

Bonds are essentially a loan that you make to a company or government, that they agree to pay back with interest along the way. They tend to be less volatile than stocks. Their prices are influenced by interest rates and the credit quality of the issuer. Bonds issued by stable governments are usually less volatile than corporate bonds.

The Impact of Volatility on Your Investments

Volatility affects your investments in various ways, depending on your financial goals and risk tolerance. Investors will view and handle volatility differently, based on their strategy and goals.

Short-Term Investors: If your financial goals are short-term, high volatility can be a double-edged sword. On one hand, it offers the potential for significant gains. On the other hand, it poses a risk of substantial losses. Those seeking quick profits often thrive in volatile markets but also face higher risks.

Long-Term Investors: For long-term investors, volatility is part of the journey. While short-term fluctuations can be unsettling, a long-term perspective often reveals that markets tend to rise over extended periods. This approach allows you to ride out the ups and downs, focusing on the overall growth of your investments. It’s like sailing through choppy waters, knowing that eventually, you’ll reach calm seas.

Balancing Volatility with Stability

It’s crucial to balance the desire for growth with the need for stability. Here are a few strategies to help you navigate volatility:

Diversification: Spreading your investments across different asset classes can help manage the impact of volatility. Diversification ensures that the poor performance of one investment doesn’t overly affect your portfolio.

Regular Monitoring and Rebalancing: Regular monitoring helps you stay informed about market conditions and your investment performance. Rebalancing your portfolio periodically ensures that it remains aligned with your risk tolerance and financial goals.

Active Participation: Active investing means understanding what you own, regularly assessing your portfolio, and making informed decisions based on your evolving financial situation. By being engaged and understanding how your investments are performing, you equip yourself with knowledge and confidence to endure the swings of the market.

Embracing Volatility

Volatility, while often perceived as a risk, also presents opportunities. By understanding and managing it effectively, you can make it work in your favor. It’s about finding a balance that aligns with your goals and risk tolerance.

At Objective Measure, our mission is to equip you with the knowledge and tools to navigate the complexities of the financial markets confidently. Whether you’re a seasoned investor or just starting, embracing volatility with a well-thought-out strategy can lead to financial resilience and success.

Investing is a journey with its highs and lows, but with the right approach and mindset, you can achieve stability and growth. Remember, it’s not about avoiding volatility but learning to navigate it wisely.

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Risk Tolerance: A Powerful Tool to Grow Your Money

8 July 2024
The Brand Office
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Categories: Financial Literacy, Financial Management, Investing

In the world of investing, understanding risk tolerance is a crucial piece of the puzzle. It shapes how we think about money and approach financial decisions, influencing the strategies we adopt and the goals we set for ourselves. Let’s dive into what risk tolerance is, how to measure it, and why it’s a cornerstone of any sound investment strategy.

Defining Risk Tolerance

Risk tolerance refers to an investor’s ability and willingness to endure market volatility and potential losses in their investment portfolio. It’s a blend of emotional and financial capacity to handle the ups and downs of the market. Some investors are comfortable with high-risk, high-reward investments, while others prefer stability and lower risk. There are many factors that affect an investor’s capacity for this risk.

Measuring Risk Tolerance

Measuring risk tolerance is both a subjective and objective process. It starts with self-assessment where investors consider their comfort level with market fluctuations and potential losses. Tools like risk tolerance questionnaires can help gauge this comfort level by asking questions about financial goals, investment experience, and reactions to hypothetical market scenarios.

Financial factors also play a role. These include an investor’s income, net worth, investment timeline, and financial obligations. For instance, someone with a high income and few financial responsibilities might have a higher risk tolerance compared to someone nearing retirement with significant financial commitments.

The Evolution of Risk Tolerance

Risk tolerance isn’t static; it changes throughout an investor’s life. Young investors, with longer investment journeys ahead of them, might tolerate higher risk since they have time to recover from potential losses. As investors age and approach retirement, their risk tolerance often decreases because their focus shifts to preserving wealth rather than accumulating it.

Major life events can also influence risk tolerance. Marriage, buying a home, having children, or significant changes in income can all prompt a reassessment of how much risk one is willing and able to take on.

Risk Tolerance and Investing

Understanding your risk tolerance is vital for choosing investments that align with your financial goals and peace of mind. It impacts how you approach your investments, dictating the balance between stability and growth. Those with a clear understanding of their risk tolerance can remain composed during market volatility, patiently sticking to their long-term strategy rather than making impulsive decisions. Engaging with your investments, regularly assessing your portfolio, and staying informed about market changes all support your effort to make thoughtful, informed decisions that align with your financial goals.

The Importance of Regular Reassessment

Since risk tolerance is a changing factor, it’s important to reassess regularly. Markets shift and personal circumstances evolve, and what once felt like a reasonable risk might no longer be a good fit for your life. Regular reviews, such as an Annual Investment Physical, will ensure your investment strategy remains well aligned with your financial goals and how much risk you want to carry.

Risk tolerance is more than just a buzzword in the world of investing; it’s a fundamental aspect of a well-rounded strategy. By understanding and regularly adjusting for your risk tolerance, you can navigate the complexities of the financial markets and make informed decisions that align with your changing financial goals. Remember, investing is a journey; start wherever you are now and adjust as you go. Fundamentals like risk tolerance will help you continue to develop your understanding, and gain the confidence to reach your desired destination.

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The Killer Mistakes How to Avoid Them

8 July 2024
The Brand Office
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Categories: Financial Inspiration, Financial Literacy, Financial Management, Investing

Investing is one of the most powerful tools for building wealth and securing your financial future. Part of building up financial literacy is to explore and understand the potential risks and pitfalls of the process. Our Investment Essentials Course details 5 Killer Mistakes of Investing and teaches you rules for avoiding each. Recognizing and navigating around these common mistakes is the first step in safeguarding your investments.

The Best Day to Start is Today

One of the most common and regrettable mistakes is delaying the start of your investment journey. Investing is a long-term endeavor, and by starting now, you give yourself time to adjust to the learning curve and build some experience. Just like planting a tree or nurturing a garden, investments need time to grow, and starting today will give you the benefits of time and compound interest.

Aligning Your Investments with Your Goals

Understanding your future goal is crucial for determining your approach. Whether you’re saving for a house, your child’s education, or retirement, aligning your investments with your goals will ensure that your portfolio is targeting your specific needs. A balanced mix can provide both growth and stability. Tailoring your asset mix to reflect your timeline, risk tolerance, and financial objectives will set you up for success.

Knowledge is the Key to Success

We understand that knowing too much can become overwhelming, but not knowing enough is incredibly dangerous. It’s important to find a balance. Before committing to a new investment, be sure you understand what it is, how it works, how much it costs, and how it aligns with your goals. Avoid investing in things you don’t understand, and aim to know enough to feel confident and comfortable in the process.

Understanding What You’re Paying

Investment fees can erode your returns over time. These costs can add up, and an annual review of your accounts provides an opportunity to check in on things. This practice also helps you maintain good investing habits and gives you a regular checkpoint for making changes, so you can avoid reacting impulsively to the swings of the market. Seek out cost-effective investment options to maximize your returns and adjust your portfolio occasionally, to stay aligned with your targets.

Investing As a Disciplined, Habitual Process

Market volatility can tempt investors to make impulsive decisions driven by fear or greed. Such emotional responses often lead to poor outcomes. During extreme market conditions, it’s crucial to stay calm and avoid making significant changes to your investment strategy. Exercise restraint and allow your investments the time they need to perform. Your strategy will see you through market volatility and by making modest adjustments at routine times, you will create a sense of control and stability within the process.

Investing doesn’t have to be a daunting task filled with pitfalls. By avoiding common mistakes and adhering to basic rules, you can build a strong and resilient investment strategy. Remember, investing is a journey that requires patience, discipline, and active engagement. With the right approach, and a bit of grace, you can navigate the complexities of this financial world and achieve your long-term goals.

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Secure Your Money: Active Investing Leads to More Growth

6 June 2024
The Brand Office
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Categories: Financial Management, Investing

At Objective Measure, we aim to empower individuals to take control of their financial future through active participation in their investments. The journey from passive to proactive investing might seem daunting, but it’s an important step toward attaining financial stability and future success. This blog will explore how you can transition to an active investing mindset and why it’s essential for your financial well-being.

Understanding the Shift: From Passive to Proactive

Passive investing often involves setting and forgetting your investments, leaving them to ride the waves of the market with minimal intervention. While this approach can seem convenient, it increases your risk exposure and decreases your opportunities. Active investing, on the other hand, means engaging with your investments, understanding them, and making informed decisions to align them with your changing financial goals.

Getting Started: Access Your Accounts and Understand Your Assets

The first step towards active investing is gaining access to your existing investment accounts in order to understand what you own. Take the time to track down and log into your accounts, review your holdings, and familiarize yourself with each investment. Know what assets you have, how much they are costing you in fees, and how they are performing.

Evaluate Your Financial Goals

Setting clear financial goals is the foundation of an active investing strategy. Ask yourself what you want to achieve with your investments. Are you saving for retirement, a down payment on a house, or your child’s education? Defining your goals will help you tailor your investment strategy to meet your specific needs. Your goals and approaches may change throughout your life, so this step in the process will serve you throughout your financial journey.

Understand Your Risk Tolerance

Risk tolerance refers to your ability and willingness to endure market volatility. Are you comfortable with the possibility of short-term losses for long-term gains, or do you prefer more stable, low-risk investments? The answers to these questions can be found in the financial goals you’ve just set up; do you need money in the short-term or are you focused on the long-term? Your risk tolerance will guide your investment choices and help you build a portfolio that aligns with your comfort level.

Staying Engaged with Your Investments

Active investing is not about constantly buying and selling assets. Instead, it’s about being informed, making strategic decisions, and regularly monitoring your investments. Set a schedule to evaluate your investments at least annually. During these reviews, assess how your investments are performing relative to your goals, check if they still align with your risk tolerance, and make adjustments as your goals or investment priorities change.

Ask the Right Questions

Are the assets in your portfolio performing as expected? Have your fees changed over the last year? Are there any new opportunities or risks you should be aware of? How do current market conditions affect your holdings? Seeking answers to these questions will keep you informed and proactive.

The Benefits of Active Investing: Confidence and Control

As you engage more with your investments and deepen your understanding, you’ll gain confidence in your financial decisions. This confidence reduces anxiety and fosters a sense of control over your financial future. By staying informed and engaged, you’ll also build resilience, positioning you to calmly navigate market volatility and make adjustments as needed. Mistakes and setbacks will become learning opportunities, strengthening your ability to weather financial storms.

Embrace the Journey and Achieve Your Goals

Transitioning from passive to proactive investing is a journey that requires commitment and continuous learning. Ultimately, active investing helps you stay on track to achieve your long-term financial goals; by regularly reviewing and adjusting your investments and keeping them aligned with your objectives, you increase your chances of success.

At Objective Measure, we are here to support you every step of the way. By educating yourself, engaging with your investments, and embracing the learning process, you can navigate the complexities of the financial markets with confidence and resilience.

Remember, investing is not just about growing your wealth; it’s about building a future of freedom, fulfillment, and financial well-being. So, take charge of your financial journey today and transition to an active investing mindset. Your future self will thank you.

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Investing in Your 20s and 30s: Why Investing Matters Now

6 June 2024
The Brand Office
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Categories: Financial Literacy, Financial Management, Investing, Saving

In your 20s and 30s, the idea of investing might seem premature or even daunting. Retirement feels far off, and the complexities of the financial world can be intimidating. However, investing early offers a significant advantage that cannot be overstated: time. Time is the magic factor behind compound interest, where your investments earn returns, and those returns generate their own increasing returns, exponentially growing your wealth. The sooner you start, the more powerful this effect becomes.

Consider this: the difference between starting to invest in your 20s versus your 30s can result in having to save 50-100% more money over your lifetime to achieve the same financial goal. This isn’t just a small gap—it’s a game-changer. So, how do you start investing in your 20s?

Learn the Fundamentals

Understanding the basics of money management will empower you to think about investing from a personal perspective, understanding that you are in the right place and now is the right time to start. Developing a foundational understanding of financial concepts and essential building blocks will help you ask the right questions and set specific goals. This knowledge isn’t just for now—it will serve you throughout your lifetime of investing.

Financial literacy opens up new topics and curiosities, allowing your investing habits to expand and adapt to your changing needs as life ebbs and flows. Start with the basics: budgeting, saving, and understanding how different investment opportunities work. Resources like books, online courses, and financial blogs can provide a solid starting point.

Start Where You Are

Wherever you are with personal finances, now is the perfect time to start investing. Even small amounts will build valuable habits and develop the discipline to set money aside consistently. If you have access to a 401(k) through your job, contribute to it monthly (more on this below.) If not, aim to save enough to open a basic retirement account like a Roth IRA. The key is to start now, no matter how modestly.

Starter Investment Funds

If your employer offers a 401(k) plan, take advantage of it. Aim to contribute as much as possible, ideally up to 10% of your income. If your employer matches contributions (commonly between 2% and 6%), make sure to invest at least enough to get the full match—this is an automatic boost to your retirement fund that comes without any extra effort! Understand any vesting requirements, which are conditions that may require you to stay with the employer for a certain period of time before the matched funds are yours to keep.

If a 401(k) isn’t an option, consider opening a Roth IRA. Contributions to a Roth IRA are taxed before they enter the account, and withdrawals in retirement are typically tax-free. This means your investments grow tax-free, which can be a significant advantage over the long term.

High Risk is an Opportunity

Risk is more tolerable over a long period of time. While the stock market is known to be volatile, it typically trends upwards over decades. So, if you have time to ride out the ups and downs, stock funds can provide significant growth. They might not be the best choice for money you’ll need within 5-10 years, but for investments held for 20, 30, or even 40 years, they can be highly beneficial. Understanding your risk tolerance and aligning it with your investment plan is key.

Financial education will set you up for success and understanding the basics means you know where you are now and where you want to go next. Start saving today with whatever you have. Starting now means practicing discipline, getting acquainted with account and fund options, and thinking about your short- and long-term financial goals. Investing is for everyone; and remember, it is a marathon, not a sprint. By starting early, you leverage the incredible power of compound interest and set the stage for a financially secure future. With time, knowledge, and consistent effort, you can achieve your financial dreams.

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Time is Money: Seize the Moment for Financial Growth

3 May 2024
The Brand Office
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Categories: Uncategorized

When it comes to investing, the tick of the clock is as important as the tick of the market. Whether you’re just starting your career or eyeing retirement, the role of time in investing is second to none. At Objective Measure, our mission is to unravel the mysteries of investing and empower individuals to get involved in their financial futures. Join us as we explore how time is your greatest asset and why it’s never too early—or too late—to start investing.

Why is Time So Important?

Time, often underestimated and overlooked, holds the key to unlocking the full potential of your investments. It’s the secret ingredient that fuels compound interest and amplifies your wealth with each passing year. Time is also the resource we squander the most, succumbing to feelings of embarrassment or procrastination when it comes to investing.

There’s a famous quote that applies here: “The best time to start investing was 20 years ago; the second best time is today.” This simple yet profound statement encapsulates the essence of time as a factor in investing. Whether you’re a recent college graduate or approaching retirement, every moment wasted is a missed opportunity for financial growth.

The Beauty of Compound Interest

Compound interest, described by Albert Einstein as the eighth wonder of the world, illustrates the exponential impact of time on your investments. When you reinvest your earnings, you magnify the effect of interest and allow your wealth to grow exponentially over time. The longer your money is invested, the more that growth compounds, making early investing the cornerstone of long-term financial success.

The Wisdom of Life Experience

Time is the keeper of all your compounding knowledge and experience. The journey of financial literacy begins with the fundamentals and leads to more advanced concepts. For example, the suitability of different investment products for different time horizons. Some assets offer more volatility and growth, while others offer stability and consistency—understanding the difference will enable you to make the most of each. But it’s not just about the returns; it’s about the experience gained along the way.

Time as it Influences Retirement

Even if you’re nearing retirement or already retired, time remains a valuable tool in your investment kit. By staying engaged with your investments and adopting strategies that align with your changing financial priorities, you can continue to grow your wealth while enjoying the fruits of your labor. From assets designed to build income to those that protect your savings, there are plenty of options available to keep you financially secure throughout retirement.

Seize the Moment

Time is not just a fleeting moment—it’s the driving force behind successful investing. And in a world of uncertainty and volatility, investing offers stability, resilience, and empowerment. Whether you’re just starting out or nearing retirement, remember that it’s never too early (or too late) to start investing. So, seize the moment, embrace the power of time, and get started investing today. Your future self will thank you for it.

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The Strategic Approach You Need to Know for Financial Success

3 May 2024
The Brand Office
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Categories: Uncategorized

The journey towards financial success is a long and winding one, filled with distractions and temptations. The best guide for this adventure is a well-drawn map, which accounts for your unique strategy, priorities, and goals. Developing a strategic approach to your financial vision can be overwhelming, but at Objective Measure we know the key: Active Investing. In this guide, we’ll walk you through the essential steps of creating a strategic plan for financial success.

A Foundation of Education: The First Step

All things begin with understanding. Take the time to learn the fundamentals of personal finance, from budgeting to saving, and emergency planning to retirement goals. This knowledge forms the foundation of your financial literacy, providing you with the necessary groundwork to navigate the complexities of investing.

Engaging with Your Investments

It can be easy to start with a “set and forget it” mindset, but passive participation will leave you in a reactive posture, missing opportunities and getting emotionally swept up in the market. Actively engaging with your investments gives you more information, control, and confidence. Start by understanding your investments: know what you own, ask the right questions, and stay informed about your assets.

Set Clear Goals and Milestones

A key component of strategic planning is setting clear, achievable goals and milestones. Whether you’re saving money for a new home, your children’s education, or your future retirement, specific targets will help you stay focused and motivated. Break down your long-term goals into smaller, manageable milestones, and don’t forget to track (and celebrate!) your progress along the way.

Understand Your Risk Tolerance

Every investor is different, and each carries a variable tolerance for risk. Before making investment decisions, take the time to assess your risk tolerance and understand how much volatility you can comfortably manage. Risk tolerance accounts for factors like your financial situation, personality and experience, liquidity needs, and investing goals and timelines.

Learn and Practice Decision-Making

Investing is not just about returns; it’s about developing an intentional strategy that accounts for your individual goals and circumstances. Take the time to research different investment options, understand their potential risks and rewards, and practice making investment decisions that align with your long-term objectives. Remember, investing is a journey, and mistakes are inevitable; treat each mistake as a learning opportunity and use it to refine your investment strategy.

Regularly Review and Adjust Your Plan

The financial landscape is constantly evolving, and your investment strategy should adapt to fit these changes. Regularly review your investment portfolio, monitor its performance, and adjust as needed. Whether it’s rebalancing your portfolio or exploring new investment opportunities, staying proactive and adaptable is key to long-term financial success.

Embrace Patience and Persistence

Rome wasn’t built in a day, and neither is wealth. Practice patience and discipline as you work towards your goals, knowing that success takes time and dedication. Stay focused on your long-term objectives, and don’t let short-term market fluctuations distract you or derail your progress.

An enriched and abundant financial future requires a strategic approach, active participation, and an adaptive plan. By learning the fundamentals and creating a personalized strategy, you can navigate the complexities of investing without ever losing track of your goal. Remember, the journey to financial success is unique for each individual, but with practice, discipline, and patience, you can move with confidence toward financial freedom and success.

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Building a Better Safety Net: From Emergency Funds to the Gift of Wealth

5 April 2024
The Brand Office
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Categories: Financial Literacy, Financial Management, Investing

At Objective Measure, we believe in empowering individuals to take control of their financial future. Today, we’re diving into the crucial steps of establishing an emergency fund and stepping into the world of investing. These are not just tasks to check off your financial to-do list; they’re essential components of a robust financial safety net that will enable you to weather the storms of life.

Emergency Funds: Invest in Your Peace of Mind

An emergency fund is a short-term investment tool, designed to save you from moments of financial stress. It’s your backup plan and your first step toward peace of mind. In order to endure financial ups and downs without derailing your long-term goals, an emergency fund cushions you from unexpected hardships. The more you have saved, the more flexibility and relief you experience when financial difficulties hit.

If you’re just beginning your saving journey, aim to set aside $1,000 for emergencies. It’s a modest start, but a crucial step in the right direction. Once you’ve hit that mark, expand your emergency savings to cover expenses or income for a set period of time (3 months, 6 months, etc.). This cushion will provide breathing room in the event of a job loss, medical bills, or other financial emergencies, and will stop the financial impact from boiling over.

Investing: Planting Seeds for Future Growth

After securing your emergency fund, it’s time to turn your attention to investing.Before diving in headfirst though, take a moment to reflect on your goals: what are your plans for the next five to 10 years? Be sure to include any major financial goals such as buying a home, getting married, starting a family, or going back to school. This exercise will help you determine your short-term priorities and cash needs, as well as your risk tolerance and long-term timeline.

Investing isn’t a one-size-fits-all endeavor; it’s about developing a strategy that aligns with your unique circumstances and aspirations. While your emergency fund provides short-term relief and security, your investments should aim to leverage time and compound interest, building wealth over the long haul and serving as a safety net for the future.

Laying the Foundation: Education and Engagement

Education serves as the groundwork for your financial well-being and will unlock the tools for successful saving and investing. Just as you wouldn’t build a house without a solid foundation, you shouldn’t dive into investing without understanding the basics. Take the time to educate yourself on investing strategies, financial products, the market, and risk management. With these pieces firmly understood, you will be able to build a path toward your unique goals.

Active participation will move you forward from education into engagement: the key to unlocking your full potential. To make the most of your investments, it’s important to know what you own, what it costs you, and how it’s affected by changes in the market. Research, regular reviews of your portfolio, and asking the right questions will keep you tuned into what’s happening with your investments. This type of active engagement empowers you to make decisions with confidence.

Realizing Your Financial Dreams

The journey to financial independence is a marathon, not a sprint. Along the way, you’ll encounter challenges and moments of doubt. Be patient with the learning curve, give yourself grace, and embrace the journey. With the right knowledge and approach, you will be equipped to navigate the journey with confidence. Investing isn’t just about chasing returns; it’s about building your future of freedom, security, and abundance.

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