Money Wise: Financial Q&A

Brian Watson, CFP

Q: What type of returns should I be looking to receive in my investments?

A: This is a question where two variables are relevant: time horizon and risk tolerance. If the time horizon for needing the money is short, say less than five years, consider very conservative investments such as CDs, Money Market Accounts, or other conservative allocations. If the time horizon is longer than five years, the money should be allocated based on your risk tolerance.

Risk tolerance is the level of risk or volatility you are comfortable with. For example, Option A may generate an expected level of return of 5.5 percent, but also incur years where the return is -1 percent. Option B may generate an expected level of return of 6.5 percent, but incur years where the return is -7 percent. Everyone has a different risk tolerance and thus would choose different options. 

In summary, a short-term goal usually would be invested very conservatively, thus very little volatility. A longer-term goal will depend more on your risk tolerance. As simple as this sounds, most investors miss this thought. Seek professional help if you feel it feel it would be beneficial to you.

Brian Watson, CFP
Koss Olinger Financial Group
2700-A NW 43rd St
Gainesville, FL 32606
(352) 373-3337
brianw@kofinancial.com

Securities Offered Through ValMark Securities, Inc. Member NASD/SIPC.  ValMark and Koss Olinger are separate entities.

Advisory Services offered through Koss-Olinger Consulting, Inc., An SEC Registered Investment Advisor
2700-A N.W. 43rd Street, Gainesville, Florida 32606
(352) 373-3337 Fax: (352) 373-1864 (800) 373-3302 Toll Free

Answer to "American Flag Trivia":

A: Distress. It means, "I need help, I'm in trouble."

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