Color Financial Focus


Take steps to help ‘immunize’ your portfolio


Now that winter is almost here, you


probably see “Flu Shots Available” signs at many of your local pharmacies. Whether or not you decide to get a flu shot depends on your individual situa- tion, of course, but you may benefit from the idea of immunization in other areas of your life — such as your investments. Specifically, you may want to help


Cherie’s


All our locations are: Skyland • 274-4416


Weaverville Plaza • 645-6100 River Ridge • 298-9277


“immunize” your portfolio, as much as possible, against some of the volatility we’ve seen in the financial markets over the past couple of years. How can you do this? Here are a few suggestions: • Diversify, diversify, diversify. If you


JOIN US AS WE CELEBRATE You’re invited to our holiday open house. THE HOLIDAYS.


We believe it’s important to express our appreciation for the opportunity to help individuals in our community. In that spirit, we invite you to bring your family and friends to our holiday open house as we say “thank you” to our clients, friends and community.


We hope you can join us. Refreshments and light snacks will be served


December 15, 2010 2:00 p.m - 6:00 p.m. Edward Jones - 61 Weaver Blvd., Weaverville, NC 28787 RSVP Please call (828) 645-0341


When: Where:


Bill Boughton, AAMS® Financial Advisor


.


61 Weaver Boulevard Weaverville, NC 28787 828-645-0341


www.edwardjones.com Member SIPC


were to only own stocks, your portfo- lio would, at times, see some big gains — but at other times, you’d take some big hits. If you just owned bonds, you’d probably see fewer fluctuations than if you just owned stocks — but you’d al- most certainly never get the gains you need to help achieve your goals. If you kept all your money in cash instruments, you’d protect your principal, but you’d eventually lose ground to inflation. In short, you can’t succeed as an investor by putting all your money in one type of asset. You need to spread your resources among stocks, bonds, and cash invest- ments. And even within each of these categories, you need to diversify. For ex- ample, try to own a mixture of growth stocks and income-producing stocks; short-term and long-term bonds; and a variety of cash instruments. While diver- sification, by itself, can’t guarantee profits or protect against loss, it can give you op- portunities for potential success and help shield you from severe downturns that, at any given time, primarily affect just one asset class. • Know your risk tolerance. If you fre-


quently find yourself surprised, or per- haps dismayed, at the fluctuations in your portfolio, you may be overestimat- ing your risk tolerance. If you familiarize yourself with your investments before you buy them — and you should — then you probably shouldn’t be surprised at how they perform. So, if you own growth-oriented stocks, you need to ac- cept the inevitable short-term volatility in exchange for potential gains over the long term. But if you’re constantly wor- ried over temporary setbacks, you may be taking on too much risk for your comfort level. If this happens, you may need to rebalance your portfolio to better accom- modate your true risk tolerance. • Maintain adequate cash reserves. Hav-


ing sufficient cash in your portfolio can help you combat volatility in at least two ways. First, since cash essentially doesn’t fluctuate in price — though it may lose value over time, relative to inflation — its very presence can help stabilize your port- folio. And second, if you have enough cash in your investment mix, you may be less likely to dip into your long-term investments to pay for short-term needs, such as a major car repair, a new furnace


28 THE TRIBUNE/LEADER - December 2 - December 8, 2010 www.weavervilletribune.com


and so on — and the less you disrupt your investments, the more progress you can make toward your goals. It’s not possible to fully shield your in-


vestments from volatility all the time. But by taking the steps described above, and by maintaining a long-term perspective, you can strengthen your portfolio’s resis-


tance, and improve your own responses, to the effects of price fluctuations. And that’s a healthy way to invest.


Tis article was written by Edward


Jones for use by Bill Boughton, Weav- erville’s local Edward Jones financial advisor.


271 Haywood Street • 828-252-4270


2851071


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