Of the “Seven Wonders of the Ancient World,” the only one still in existence is the Great Pyramid of Giza. This tells you something about the strength of the pyramid structure, but it also suggests that the pyramid may be a good metaphor for other endeavors that you wish to endure – such as your investment strategy.
In fact, by creating an appropriate “investment pyramid,” you could address your key financial needs and goals. What might this pyramid look like? Consider the following “layers”:
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Your total investment mix may include investments from every part of the pyramid, but how much should go into each layer? There’s no one right answer for everyone. In filling out your investment pyramid, you’ll need to consider your risk tolerance, time horizon, short- and long-term goals and other factors.
So, if you are a fairly conservative investor, you might place fewer investment dollars in the “aggressive” layer than someone who was willing to take more chances in exchange for potentially higher returns. However, the various weightings within your investment pyramid will likely change over time. As you near retirement, for example, you may want to move some – but certainly not all – of your investments from the “growth” layer to the "growth and income" or “income” layers.
An investment professional can help you review your evolving family and financial situations and make recommendations on what changes you may need to make to your pyramid. Pyramids last a long time. And if you build and maintain your investment pyramid with care, you can keep it working efficiently for many years to come.
Keith Sandvoss, a Financial Advisor with Edward Jones since 1998, is located at 208 Main St, Fort Mill. You can reach him by calling 802-4310.