| you may be surprised to learn of the many parallels
between finance and fashion. To start, your finance and fashion sense can create a
statement about you that could either make you or break you. Plus, they most definitely
require a great deal of your time, your attention and your money. Investing in your
wardrobe is similar to investing in your financial future and the wiser investor starts
with the basics.
The best clothes are timeless. Their cut, design and quality of fabric are such that with care, they can last for years. That’s what both men and women expect of the basic suits or outfits they wear through the varying demands of their day to day life. When building the basics of your wardrobe ask yourself:
And get this. Those are the same questions you should ask yourself when building your investment portfolio.
The goal is to establish some sense of order to your investing. Once you answer those important questions you can develop a strategy to put together a wardrobe of investments that are appropriate for your needs, your circumstances and that will endure through good times and bad. Remember, your savings are precious and the investments you choose to provide for your financial future should be able to hold up to the task and fit into your long-term investment strategy. So what kind of companies should be in your portfolio? Ideally, you want to buy shares in companies that are well established. Merck, MCI Worldcom, and American International Group are examples of reliable growth stocks. The have:
Limit your risk during radical market movements by diversifying your portfolio. Invest in an assortment of companies within industries that are expected to thrive in the coming decade, like pharmaceuticals, telecommunications, and finance. A portfolio that reflects several business sectors as opposed to being heavily weighted in one has a better opportunity to participate in the overall growth of our economy. Okay, so now you’re on the right road to obtaining your basics. But buyer, beware! There are still twist and turns along the way and if you’re not careful you could easily end up on the wrong side of the road or even on a dead end street. Remember you’re building a foundation here and with fashion so it is with finance, avoid the "trendy" fashionable stocks until your infrastructure is complete. I know the word on the street is, "hot stocks" have the potential to make you rich. But here’s an even more important phrase, their potential to make you poor is even greater and that’s a risk only a well-heeled investor can bare. "Hot Stocks" are running rampant in today’s market and the temptation to invest recklessly is greater than ever. But, resist the temptation! Keep your long-term investment strategy in mind and acknowledge the red flags that suggest some hot stocks aren’t hot. Hot stocks may not be so hot if:
One way to avoid the trendy fashions or hot stocks is to seek the advice of, in the case of fashion, a knowledgeable personal shopper or a fashion consultant. Within the investment world you would consult with an experienced and capable investment management firm to assist you in determining and meeting your financial and investment objectives. So remember, with "Finance and fashion" it’s very important to:
Finance and fashion parallel in many ways, but perhaps the most important similarity is, "YOU CAN’T LEAVE HOME WITHOUT THEM!" |
