Investment Plan

Individuals don’t invest due to fear from the lack of understand and funding.  Many individuals say “I Don’t Want to Lose Money”.  Most investors with a long term strategy don’t lose money.  If you invest in a six year strategy or longer, your chances of a high return is great.  Short term investors run the risk of losing money due to investment choices, time, higher trading cost and capital gains tax.

Some people in their 20’s and 30’s believe they have a lot of time to invest and profer purchasing personal items with this money.   These individuals are making a large mistake.  The key to wealth building is time.  By starting in your 20’s it’s almost guaranteed you will be a millionaire when you retire.

The first step to investing is defining goals and objectives to create an investment plan.  Providing these definitions will help identify your strategy to make you become a more successful investor.   Remember, this plan is not set in stone and can change at any given time.  It’s always smart to keep it simple (KIS) when starting.  While learning more about investing your investment plan can adapt to your new strategies.

When creating your investment plan ask yourself these questions:

  • What is purpose for my investment?
  • What is my investing time line?
  • What are my expectations?
  • What level of risk am I willing to accept?

Some individuals prefer to have an advisor to manage their investments.  If you choose to perform this strategy answer the following:

  • What services will advisor provide?  (Guidance, Asset Management, Assurance, etc.)
    • What are your expectations from the investment advisor?
    • How much do you expect to pay for these services?
      • Is the individual a Certified Financial Planner (CFP)?  What other licenses, certification and/or credentials does the advisor possess?
      • How long has the individual been an advisor?
      • What investment firms does the advisor use in their practice?
      • What is the smallest and largest portfolio managed?
      • What types of clients does the firm specialize?
      • What is the advisors investment strategy?
        • Does strategy contain index or actively manage funds?
        • High dividend, momentum or value base stocks?
        • What investment diversifications strategy does advisor employ?
      • Is the advisor a fiduciary?
      • What is the advisors fee structure? (Commissions on Purchase or Sale of Investments, Hourly Rate, Flat Fee, Percentage of assets managed, etc.)
      • What is the minimum amount required to invest with the firm?
      • Request a sample financial plan.  Ensure advisor can explain the plan structure in a way you can understand.  Ensure the data provided is simple enough to read and understand not providing a bunch of papers to confuse you.
      • How frequent does the advisor consult with their clients to review the investment portfolio?
      • Will I interact with a team or be provided an individual as a dedicated advisor?
      • What unique services does the investment firm provide?
      • What is the advisors availability?
      • Ask Advisor “Why he believes his firm is the best fit as my investment provider?
      • How long will it take to achieve my goals with the investment strategy?
    • Once you decide on an investment advisor.  Gather financial documentation for the advisor to create an investment strategy. These documents include:
      • Saving, checking, money market and cds.
      • 401K, IRA, Thrift Saving Plan (TSP) and/or other retirement investments (including pension statements and social security).
      • 529 and ESA educational investment accounts.
      • Investments outside retirement stocks, bonds, etfs, mutual funds, real estate.
      • Monthly expense report (budget plan)
      • Will or trust
      • Life insurance plans
    • You should be provided an investment plan outlining your strategy with a time line for achieving your goals.


Some individual prefer to manage their investments.  If you choose to perform this strategy answer the following:

  • Do I know what investments I want to acquire?
    • Indentify these types of security.
      • List specific investments.
  • Does the list contain the proper diverse asset allocation strategy?
  • Do you plan to use a cash or margin account?
    • Do you have the minimum amount to open an account?
    • Do you have enough cash to cover maintenance requirement on margin accounts? (Margin Accounts)
    • What is the current borrow rate? (Margin Accounts)
  • How much do you plan to initially invest?
    • How much and at what frequency do you plan to add funding to your investment?
  • Are you a long term or short term investor?
    • Define long and short term in years?
      • What is the expected trade frequency for buying and selling investments?
        • What is the expected ROR (Rate of Return)?
        • What is the maximum profit your willing to accept to sell an investment?
        • What is the maximum loss your willing to accept to sell an investment?
  • Do you require a broker who provides training using different technical analysis strategies?
    • Should the broker supply trading tools?
    • Are the desired securities available for trade?
    • Do they offer the best fee for trades (buy/sell)?
    • Do they offer satisfactory customer service when problems arise?
    • What are the service hours and contact methods?
    • How do I transfer funds to my account?
    • Is there a fee associated with method?
    • Is there a free method available such as ACH (Automatic Clearing House)?

Educating yourself on investment methods and market securities is very important when managing wealth.  There are a number of methods which you can gain knowledge to become a successful investor.  Don’t forget to get involved in discussions with others who partake in their own investment strategies.  There are many lessons one can learn from other investor mistakes.

Hybrid investors manage their own investments with strategy confirmation from an advisor.  The portfolio will be reviewed for enhancements or deviations.   This provides the investor a second point of view and possibly additional strategies he/she was unaware of.  If you choose this method utilize both sections above to formulate your investment plan.

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