When you sit down with your financial planner to create a new portfolio, you may be asked whether you would prefer to place your money in high-risk or low-risk investments. High-risk investments are defined as investments that are very likely to either under-perform or over-perform based on their current statistics. If you are wondering what type of investments to include in your retirement planning portfolio, here is a look at what you need to know about high-risk investments.
High-risk investments can provide outstanding returns.
When you invest in an IPO, or Initial Public Offering, you will be investing in a young company that has not yet proven itself on the public trading market. While high-risk investments such as these can run the risk of dropping in price, they can also soar in value significantly.
High-risk investments are not recommended for amateurs.
If you are brand new to investing, you may want to steer clear of purchasing too many high-risk stocks. When your portfolio is filled with high-risk investments, you may watch your money fluctuate significantly from day to day. To achieve steady gains, consider creating lower-risk portfolio that contains proven stocks and bonds.
High-risk investments can be part of a healthy portfolio.
As you are working on your financial portfolio with your advisor, you may want to consider including a few high-risk investments. By combining high-risk investments with lower-risk purchases, you can create a diversified portfolio that will grow steadily, while also benefitting from financial trends and fluctuations.
At Financial Directions, LLC, our retirement planning team will be able to put together a financial portfolio that is tailored to your specific needs. When you need financial advice in Tucson, look no further than our offices for assistance. Give us a call at (520) 408-7777 or visit our website to make a financial planning appointment for your retirement portfolio.