How to Invest

Before I first met my mentor, Patrick Cross, I didn't quite understand exactly what a stock broker's job consisted of. At first, I thought that they did hours of independent research to predict what stocks would perform well and which would flop, but after meeting with Patrick for approximately an hour, he explained that the investment process involved more personal interaction than one might expect. As it turns out, companies such as Edward Jones Investments, use research from outside parties and follow trends in prices in ATTEMPTS to predict growth. 

Customer relations are ultimately the key to successful investments. Mr. Cross explained to me that, by first getting to know the investor, a broker will better understand what types of investments will best suit their needs and/or financial goals. Younger investors tend to participate in more risky behavior with stocks that have the potential to grow or crash at any moment. Although there will always be time to recover a loss in the future, it's important to remember not to keep all your eggs in one basket, in other words, not risking more than is necessary or wise. Bonds will often be a safe investment option with relatively low interest rates, but a definitive end value and no room for growth as with stocks.

As investors age and retirement nears, people tend to reduce their risky behavior as now, their investments will hopefully pay off. Now that retirement money is at stake, a more conservative investment approach is taken in which the majority of the investor's money is put into low interest savings accounts, bonds or other financial tools that allow little to no monetary growth, but more security.

However, these strategies are simply used as a rule of thumb, and of course an individual's financial history and goals will be taken into account to build the right portfolio for them which will hopefully include the perfect balance of low and high risk investments with varying interest rates, leading to higher dividends and financial stability.