Beginner's Guide to Asset Allocation

Before investing, there are some steps you should take in order to give you the best chance at success. This quick guide to asset allocation will give you a few tips for beginners on things such as green money management habits, green investing, risk tolerance, and stocks. Investing doesn't have to be overwhelming and complicated if you just keep it simple starting out.

1. Personal assessment of financial situation

The first step in the beginner's guide to asset allocation is to look at yourself and do a personal assessment of your financial situation. Figure out how much debt you have, how much liquid cash you have on hand, and how many assets you own.

2. Look at your time horizon for investing

A time horizon is the number of years you have to achieve your financial goal. A person with a longer time horizon can be riskier with their investments as opposed to someone who has a short time horizon.

3. Asses risk tolerance

Are you a conservative investor or a risk taker? Your time horizon plays into this as well, but it boils down to how risk averse you are as an individual.

4. Decide what types of investments to acquire based upon financial goals

Are you going to invest your money into stocks, bonds, real estate, cash equivalents or a combination of all of these investment tools? Green investing has been on the rise and many people are now applying green money management habits in their lives such as buying hybrid vehicles, recycling, and investing in environmentally friendly companies.

Before doing any sort of investing it is always recommended that you sit down with a professional and get some solid advice.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.