After these requirements have been met, you can begin to develop your investment plan. Think carefully about the kinds of assets that are appropriate to your objectives and risk tolerance. Then assess your ability to bear risk by making a careful assessment of your personal financial position, taking into account age, family responsibilities, income level, cash flow, and tax considerations. Even your temperament has a bearing on your risk tolerance. If you are a worrier, confine your commitments to relatively safe securities.
Peace of mind means a great deal.
Once you have weighed all of these factors and considerations, you are ready to set up some parameters for your portfolio. A qualified financial advisor can help you determine an appropriate way to allocate your assets. If you do not already have a stock broker, ask someone whose professional judgment you trust to recommend one. Some generalizations can be made about what kind of financial assets are appropriate for people at different stages of their lives. Usually, young adults with a lengthy time horizon and a growing income potential should be willing and able to assume more risk than older people who are nearing or are in retirement.