Investing is a common way for people to build wealth. But it can take many forms and involve different levels of risk. What makes sense will differ from person to person.

Why? Because everyone’s financial circumstances are different. What may be good advice for a 23-year-old just leaving college and entering the workforce may not be the best course of action for a 57-year-old looking to preserve or even catch up in retirement savings.

Some investors may be able to afford a little risk in their investment portfolio … others may want to avoid risk at all costs. In addition, some folks may be able to manage their own budget and planning, but others may need a financial professional to sort out their situation.

Basics of investing

Risk: All investments have risk. How much risk typically depends on the type of investment. Understanding the risks involved, both in investing and in specific investments, is essential before committing any money.

For example, bank certificates of deposit (CDs) and U.S. Treasury bonds are generally considered lower risk than stocks or shares in a venture fund. But CDs and bonds typically command lower rates of return, because they are less risky. The general rule is the higher the risk, the higher the potential rate of return. But rates of return outside of CDs and Treasury bonds — and particularly for investments tied to markets — are not guaranteed.

Nor is there such a thing as a safe investment. History is replete with examples of investments people thought were “safe” going down in value.

So why invest at all? Because it’s a way that has proven, over time, to build wealth. It’s also a way to counter inflation, which is the loss of value in savings because of general increases in prices and costs.

The practice of dollar-cost averaging doesn’t eliminate risk. But, by lowering the average purchase price, it does help prevent investors from overbuying shares in the face of a market retreat. However, it also means gains are limited in the face of a market spike.

“When stocks go down, people often get fearful and sell,” said the Financial Industry Regulatory Authority in a discussion of the practice.  “Then, when the market goes back up, they might miss out on potential gains. On the flip side, when the stock market goes up, investors might be tempted to rush in. But they could end up buying just as stocks are about to drop. Dollar-cost averaging can help take the emotion out of investing. It compels you to continue investing the same (or roughly the same) amount regardless of the market’s fluctuations, potentially helping you avoid the temptation to time the market.”

Steady investment strategy

Some investors, especially those willing to commit time to market study and research, may elect to move into more complex and sophisticated strategies and systems. Indeed, there are people who decide to become professional investors.

Most people, however, have careers and make a living in other ways, and use investment to build wealth and prepare for retirement. And so, they regularly put their earnings in a well-diversified portfolio and reinvest any gains along the way.

Of course, the level of investment and financial goals can differ from individual to individual. Many people opt to consult a financial professional to set an investment plan. But for most people, regular and steady investing can help them win the race.

Provided by Brian B Addy a financial representative with Magnolia Wealth Strategies courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). 

2023 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 MM202601-303986

Frank and Brenda Stinson first started Uniquely Yours in 2008. But, after several years of average sales, the furniture market wasn’t what they thought it to be—so they evolved the business into a showroom expertly arranged with charming consignment pieces. Today, Wagner’s connections in New Orleans and Dallas provide the store with a steady stream of barely used high-end furnishings, and his work with local consigners allows him to sell a wealth of home accessories, lamps, fixtures, rugs, and consoles. Relationships with wholesalers and design consultants allow Uniquely Yours to show and sell many discontinued sample items.

Designers at Uniquely Yours can help decorate for any occasion. “We may have just the right piece for your new space and can re-sell furnishings that no longer fit your lifestyle,” says Wagner. Uniquely Yours moves items quickly, so consigners don’t need an appointment. Select items are accepted for a 90-day consignment period at a negotiated price. If customers don’t find what they’re looking for, Wagner can add their name and desired items to a wish list. Customers on the wish list get the first opportunity to purchase sought-after pieces that come into the store.

“I love people and I love beautiful things,” says Wagner. “We want to work with customers and consigners to make everybody happy. At Uniquely Yours, we take pride in providing the best shopping experience in a unique resale environment. Whether you’re looking to update or completely redecorate, we offer like-new home furnishings and one-of-a-kind collectibles and fine furnishings and decor. With merchandise arriving daily, you’ll always be able to find something new and unique!”

“Stop by to see everyone’s favorite local celebrity, “Birdy” Young. She is a staple at Uniquely Yours, who is expertly knowledgeable about furniture and will never forget a name!”