The idea of investment management is to take a look at your investments and plan for tomorrow. considering how long your money is invested and what it is invested in are very important for you over all planning.

Your investment plan should be centered around your goals for the future. Do your goals include a comfortable retirement, building a new home, vacation funds for next year, a college education for yourself or your children, or paying off your credit card bills?

Whatever your goals are, you need to prioritize them and determine how long of a time horizon you have until you want these goals to be a reality.

Depending on your financial situation, you may find your income and expenses allow you to only be able to focus your investment plan on achieving your top priority goal.

You will also need to determine how much risk you are prepared to tolerate in order to earn the return needed to reach your target.

The general rule is:

Investments with higher risks have more potential for earning higher returns...

Investments with lower risks generally offer the likelihood of lower returns...

If you are not comfortable with the idea of losing any of the money you invest or you are shooting for a shorter time horizon, you may fall within the category of a conservative investor and invest in shorter-term guaranteed investments.

However if you are looking at a much longer time horizon and need higher returns in order to achieve your goals, you may categorize yourself as an aggressive investor and focus more of your investments in riskier investments like stocks.

Your allocation of investments will be dictated by:

• your goals
• your time horizon
• your risk tolerance

A mix or diversification of investments between stocks, fixed income and short-term assets is a common method to control investment risk.

Typical asset allocations by age are shown in these charts. Generally, the older an individual is, the less tolerance the individual has for risk.

Assess your particular situation and plan accordingly.