Blonch

Investors look for ways to make money in return for use of their money. There seem to be no limits on the kinds of investments that can be thought up. Business cycles show up in interest rates, economic growth (Gross Domestic Product [GDP]), unemployment, monetary growth, and inflation. In the U.S. our banking system is regulated by the federal government which delegated much of the oversight and administration to the Federal Reserve (the Fed) central banking system. Rest assured, the government is taking care of things for you.

Turmoil in the market has impacted nearly everyone. It is hard to know just what to do. Investing these days reminds me of the saying – “Predicting is hard, especially about the future.” The economic news is not good, and may not improve for a while. So, what to do? Investment choices are guided by several factors. There is no answer that applies to everybody, even during better economic times. Three factors will dominate your approach to investing: investment horizon, risk tolerance, and your involvement. Let’s look at each one.