As we head into the New Year, media outlets ranging from CNBC to the Washington Post are full of financial commentary addressing this question. On the surface it seems like a logical query.
But if you were getting ready to go out, would you ask "What Should I Wear?"... without describing where you are heading? Of course not. The clothes you'd wear to shovel snow in will be very different from the clothes you'd wear to a wedding.
That's why "How Should I Invest?" are the four most dangerous words to your portfolio. The answer to that question is often given as if one size fits all, when it's anything but. To protect yourself, here are 5 things to think about to make sure your hard earned money is invested in a way that is appropriate for your specific situation.
- When do you need to spend that money? If it's in the next 5 years you typically want to protect that money against inflation in savings accounts, money market funds/accounts or CDS rather than take market risk in stocks or bonds.
Bottom line, always remember that before anyone can give you meaningful investment guidance they need to understand where it is that you specifically want to go.
So, where are you headed, financially, in 2011?
[This post originally appeared at ManishaThakor.com.] Want more financial love? You can follow Women's Financial Literacy Initiative founder, Manisha Thakor, on Twitter at @ManishaThakor, sign up to get her email updates delivered right to your inbox here, and enroll in her innovative new online personal finance course called "Money Rules."
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