This duration can take any from months to several years. .
Another plus of long-term investment is compounding interest, interest-earning interest, which creates such an advantage for the younger long-term investors. A good financial planner takes into account these factors to produce strong financial stability at all junctures of a client's situation. The greater the duration of investing changes the volatility of risk. If the current funds are required for shortly approaching retirement, then the investor would need to make sure these funds don't disappear. Therefore, they would make sure that the money would remain in money market accounts earning your basic low interest. The younger investor's aggressiveness could range from moderate to highly aggressive. Clients need to "build a portfolio that is tailored to your investment needs, ensuring your portfolio remains structured at every stage of your life" (www.smithbarney.com).
"When it comes to strong financial planning, managing what you owe is equally as important as managing what you own"(www.smithbarney.com). Mortgage payments, car loans, and credit card bills all affect the amount of money you can invest or save on a monthly basis. To have a solid saving schedule a percentage of earnings needs to be set aside for retirement or emergencies. The average estimate is ten percent before taxes. This enables individuals to have the funds necessary when unexpected situations arise. Clients need to realize that paying yourself first is the beginning to sound financial planning. .
The net worth of the portfolio to invest is also a major issue. Hiring a broker that is qualified to allocate monthly expenses enables the investor to realize the amount of money that should be saved. Depending on the net worth of the portfolio, brokers dispense money into multiple sectors. All aspects need to be approached so the investors maintain an overall diverse portfolio.