All the disclosures have the same language: investing is a risk, a return is not guaranteed, and do not trust past results for future results. While this is true, for some, the stock market feels like a minefield of unknown investments where loss is inevitable. Many find investing in stocks a big step, but if navigated correctly, it can be the difference between retiring at 65 or 75.
Some Investments are Safer than Others
Stocks are partial ownership in publicly traded companies. Being partial owners, stockholders can vote on company matters and receive dividends if applicable. They also share in the wins and losses of the company’s stock price. Stocks carry a higher risk and higher reward than other investments and should be selected with the utmost discretion.
Conveniently, exchange-traded funds (ETFs), such as the S&P 500, are bundles of many stocks together to minimize risk particular to one company or industry. They are bought and sold on ordinary stock exchanges but should still be selected with care.
Treasury securities are among the safest investments. Also called “Treasuries,” they allow ordinary people to invest in the activities of the US Government for a positive return backed by its full faith and credit. However, with high safety typically comes lower returns. Therefore, many people with Treasuries only use them to minimize risk in their stock portfolios. Investors can also diversify among stocks, ETFs, and Treasuries to minimize applicable risk.
Comfort with Risk
Sound investing requires a long-term outlook. Stock prices may rise and fall dramatically over a few weeks or months. Investors must be aware of their emotions while conducting transactions. First State’s Gold Chip Philosophy utilizes at least a 3-5-year outlook to meet growth objectives.
Some stocks are more risky than others. First State’s financial advisors hand-select from among the largest companies with outstanding management, price stability, and two times potential reward versus potential risk.
Taking the Next Step
First State tailors portfolios to match each client’s risk tolerance and long-term objectives. The Gold Chip investment philosophy has remained unchanged for 50 years. For those interested in connecting with experienced Tulsa financial advisors, contact us at (918) 492-1361.
This overview is for informational purposes only and is not a recommendation. It should not be the sole deciding factor in making an investment. Investing is a risk and, as with all risks, a positive return is not guaranteed. Past performance does not indicate future results.