Understanding a security before investing in it is essential. The important information is included in the prospectus. What Is a Prospectus? The U.S. Securities and Exchange Commission (SEC) requires that registered securities have a document describing the following: What the security is Company history Financial details about the business Company management team Business’s financial performance Intended use of the funds Opportunities for investing in the security Risks

Maintaining a well-balanced investment portfolio in a changing financial landscape is essential. Market fluctuations, economic shifts, and changes in personal financial goals impact your investments’ performance and risk profile. Portfolio rebalancing realigns your asset allocation with your long-term financial objectives. This process helps you reach your financial goals. What Is Portfolio Rebalancing? Rebalancing realigns the asset weightings in your investment portfoli

Asset allocation is the overall mix of investment types, such as stocks, bonds, and mutual funds, in a portfolio. This mix is essential for successful long-term investing because it influences the portfolio’s performance more than the type of investments selected. What Is Asset Allocation? Asset allocation is the percentage of a portfolio’s investments in stocks, bonds, and cash. For instance, more conservative investors might have many bonds, whereas more aggressive invest

Capital appreciation is an investment’s increase in market value over time. Assets such as stocks, mutual funds, exchange-traded funds, real estate, and commodities can appreciate over time. Along with dividend and interest income, appreciation impacts an investor’s total return. Factors such as economic growth and strong company performance drive the difference between an investment’s purchase price and selling price. This appreciation is realized as a capital gain when th

A target-date fund is a mutual fund or exchange-traded fund designed for retirement: A target-date fund automatically adjusts the mix of stocks, bonds, and other investments as you approach the target date, your retirement year. The fund names include a target retirement year, such as 2045 Fund or 2060 Fund, representing the approximate date an investor expects to retire and begin withdrawals. Target-date funds are popular for investors seeking simplicity and convenience. H

A security is an investment that can be bought or sold on financial exchanges or other platforms. The investment’s monetary value is determined when traded. Investors can earn money by buying a security at a low price and selling it at a high price. Categories of Securities The following are common categories of securities: Equity Securities Equity securities, or stocks, represent partial ownership in a company: Equity securities might pay dividends, which are distribution

A stock is a security that gives stockholders a share of ownership in a company. Companies typically sell shares to gain money to grow the business. A company’s stock is first sold at the initial public offering (IPO). After that, stockholders can resell their shares on the stock market. Because a company’s expected earnings typically drive its stock prices, the prices can rise or fall. Types of Stocks The types of stock include: Common stock: Common stock entitles owners

Experts suggest different approaches to determine how much you need to save for retirement. Some say to save at least 8-10 times your annual salary for retirement. Others recommend having at least 65% to 80% of your pre-retirement income available for each year you plan to spend in retirement. The amount you need to save for retirement depends on your desired lifestyle, retirement date, and income sources to draw from. The following guidelines can help narrow down your numb

An annuity is a contract between you and an insurance company to provide a steady income stream during retirement. You invest funds during the accumulation phase, annuitize the contract when you’re ready to retire, and begin receiving regular income during the payout phase. Riders might be available for an additional fee to create a death benefit for your beneficiary or beneficiaries. Most annuities come with surrender fees. Withdrawing money during the surrender period, wh

Because you work hard for your money, you should be able to fund your lifestyle both now and in the future. However, inflation impacts the amount of money you will need to set aside to provide your desired standard of living during retirement. Fortunately, you can take steps to inflation-proof your retirement plan. The following strategies can help. Reevaluate Your Investment Portfolio Revisit your investment portfolio and asset allocation to determine whether they still

Changing jobs can be stressful. Not knowing what to do with your 401(k) or 403(b) account when leaving an employer can increase your stress level. You have four options for your 401(k) or 403(b) account when leaving a job or retiring. Two of these options include penalty-free rollovers. Understanding each choice helps determine which is right for you. The following four options include two penalty-free methods to roll over your 401(k) or 403(b) account when leaving your j

An annuity is a contract between you and an insurance company for a financial product that provides a steady income during retirement. The amount and duration of your payments are typically based on your life expectancy. Types of Annuities The three main types of annuities include: Fixed: A fixed annuity provides a guaranteed payout regardless of market conditions. An investor desiring a predictable income during retirement favors this type of annuity. Variable: A varia

A Roth IRA conversion transfers funds from a pretax retirement account, such as a traditional IRA or a 401(k), to a Roth Individual Retirement Account. The process requires paying taxes on the funds the year they’re transferred, but future growth and withdrawals are tax-free. What Are the Pros and Cons of a Roth IRA Conversion? The following pros and cons of a Roth IRA conversion impact whether a conversion might be right for you: Pros of a Roth IRA Conversion Investment

Dollar-cost averaging involves regularly investing a fixed dollar amount, regardless of the share price. For instance, you might invest $100 on the 1 st and 15 th of every month. Maintaining consistency is key to developing disciplined investing habits. Increasing investment efficiency can lower your average cost per share. For instance, if you invest $200 every month, you will purchase fewer shares when the market is up and more shares when the market is down. Over tim

A variable annuity is a type of insurance contract that combines investment with retirement income protection. Because the contract is invested in subaccounts tied to underlying investments, such as stocks, bonds, and mutual funds, it can offer higher returns than fixed annuities. A variable annuity might be a good option if you want to stay ahead of inflation and increase the value of your retirement savings. The following information can help determine whether one might b

An individual retirement account (IRA) is a personal savings plan with tax advantages for retirement: You can set up an IRA yourself or through a licensed financial professional at a bank, brokerage firm, mutual fund company, or other financial services company. You fill out an application and make an initial contribution. The company becomes the account custodian. You must have earned income from a part-time or full-time job to open an IRA. You can contribute to an account

You have three options for your 401(k) account when you leave a job: Leave your account in your former employer’s plan Roll your account into your new employer’s plan Roll your account into an Individual Retirement Account (IRA) Understanding your 401(k) account fees and investment options helps you decide whether to keep it where it is or roll it over. The following information can guide you. What Is a 401(k) Rollover? A 401(k) rollover involves transferring funds from o

A variable annuity is a retirement account. The account owner can use the funds to provide a regular monthly income, subject to the fluctuations in the value of the investments chosen for the account. The value of a variable annuity depends on the owner’s tax situation, investment and retirement objectives, and time horizon. Talking with a licensed financial professional can help determine whether a contract is right for you. What Is a Variable Annuity? A variable annuity

An annuity is a contract purchased through an insurance company that guarantees income for a specific number of months or years. You receive a monthly income in an amount set when you fund the contract: An annuity can be purchased through a lump-sum payment or a series of payments to the issuer. The money grows tax-deferred through interest payments or investments in a market index or stock portfolio. You receive immediate or deferred payments, depending on the timeline selec

I’ve heard many people say they metaphorically throw a dart at a board when deciding which investments to choose for their 401(k) account. Because most people weren’t taught how to select investments that align with their retirement goals, the options they end up with might not be right for them. Knowing your retirement goals and personal preferences helps you build an investment strategy. Understanding your investment options, selecting your 401(k) investments, and staying