As you go through life, you’ll have different financial goals – and they may require different investment strategies.
For example, someday you may want to take a vacation, perhaps to an exotic place. For this goal, you’ll want investments that are liquid and low-risk, because you’ll need a certain amount of money at a specific time, and you don’t want to set yourself up for early withdrawal or tax penalties.
Now, consider another goal: your retirement. To retire comfortably, you’ll likely need to accumulate as much money as possible. Therefore, you should have a reasonable percentage of your portfolio devoted to growth-oriented investments, taking into account your goals and risk tolerance. As you move closer to retirement, you may want to lower your risk level by moving some – though certainly not all – of your growth-based investments into more conservative vehicles.
Try to follow investment strategies designed to help meet your goals. When you do, you’ll give yourself a better chance of reaching your destinations.