Investing fundamentals in your financial journey

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Take the first step toward your financial future by building a comprehensive plan to help you reach your long-term goals. With the help of a Waddell & Reed financial advisor, you can create a financial plan that fits your personal circumstances and objectives.

While investing involves risk and there are no guarantees of future results, it can put some power behind your plans.

Stocks have rewarded patient investors

Investing in stocks may increase your potential to accumulate assets and reach your long-term financial goals. Because stocks historically have trended upward, they have provided a solid way for investors to capture growth in their investment portfolios. Likewise, their performance over time illustrates the merit of focusing on a long-term time horizon. Stocks also can help your investment portfolio withstand economic change and political uncertainty.

Stocks have rewarded patient investors

Bonds offer stability and potential income

When you invest in a bond, you loan money to an entity for a defined period of time at a fixed interest rate. Used by companies, municipalities, states and governments to finance projects and activities, bonds fall into several main categories: corporate, municipal and U.S. Treasury. Investing in bonds can add stability and potentially reduce overall price movements within your investment portfolio. In addition, bonds offer income. Bonds generally pay a fixed interest amount regardless of market conditions or outside factors, thus providing a level of security over time. As a bond holder, you receive regular payments until the bond matures.

Historical Risk to Reward

Simplify by investing in mutual funds

Selecting individual stocks and bonds can be overwhelming. One way to simplify the process is to invest via mutual funds.

The idea behind mutual funds is simple: Individuals with shared investment objectives pool their money, which is invested and managed by professionals. Mutual funds may let you take advantage of the more appealing features of a well-constructed investment portfolio, including:

Diversification: Mutual funds are available in all asset classes and investment styles. Each fund generally holds a variety of individual stocks or bonds, spreading your money across a large number of holdings. Why a mix? Various asset classes and investment styles respond differently to changes in market conditions. Investments in different classes and styles often will move in opposite directions, based on economic cycles or other influences. While diversification and asset allocation does not ensure a profit or protect against loss, it can help reduce the overall risk and volatility of your investment portfolio.

Liquidity: Mutual funds give you easy access to your money. You can sell some or all of your mutual fund shares as needed, at any time, and receive the current share price (net asset value). The value may be more or less than your original cost, and there may be fees or taxes associated with sales.

Convenience and flexibility: Services such as the automatic investment plan and reinvested dividends, and required documents, including quarterly statements and semiannual and annual reports, provide ongoing information and simplify how you manage your accounts.

Professional management: One of the biggest benefits of mutual funds is the expertise of professional money managers. Your Waddell & Reed financial advisor has access to a broad array of funds across a wide range of investment categories, and can help you find funds to fit your financial goals.

Remember a few key investing concepts

  • Follow a solid investing strategy rather than emotion.
  • Don’t let a short-term reaction overtake your long-term plan.
  • Invest regularly and stay committed to your goals.
  • Work closely with your advisor to consider all your investment options.

Create a custom-built plan today.

Whether through mutual funds or by buying individual securities, stocks and bonds are the foundation of investing. Contact a Waddell & Reed financial advisor to learn more about each option.

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This information is provided for informational and educational purposes only. Waddell & Reed believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided. This information is not meant to be a complete summary or statement of all available data necessary for making financial or investment decisions and does not constitute a recommendation.

Please note that the information provided may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Neither Waddell & Reed, Inc., nor its Financial Advisors give tax, legal, or accounting advice.

This information is not meant as financial or investment advice pertaining to your personal situation. The selection of appropriate investment, insurance or planning options and/or strategies should be made on an individual basis after consultation with appropriate legal, tax and financial advisors. Nothing contained herein is intended as a solicitation or an offer to buy or sell any product or service mentioned and they may not be suitable for all investors.

Securities offered through Waddell & Reed, Inc., Member FINRA/SIPC, are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal. Insurance products are offered through insurance companies with which Waddell & Reed has sales arrangements. Guarantees provided by insurance products are subject to the claims-paying-ability of the issuing insurance company.

Not all account types may be available on all platforms. Some products & services may not be available with all accounts. Brokerage, investment and financial advisory services are made available through Waddell & Reed, Inc., in its capacity as a registered investment adviser. Brokerage accounts cleared through Pershing LLC. SEC-Required Report on Routing of Customer Orders

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