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Investing principles

Considering how unpredictable the stock market can be from day to day, it’s understandable to be a little apprehensive about investing. But if you avoid market risk, then other risks like inflation and outliving your assets will become a bigger challenge. Investing is the engine you need to fuel your lifestyle and help reach major financial goals — today and for years to come.

Start early

Why start investing when you’re young?

Many new investors start out investing with mutual funds and exchange-traded funds (ETFs) since they require smaller investment amounts to create a diversified portfolio.1

More time for the power of compound growth to work for you

More time to weather the ups and downs of the market and reduce risk

Fewer financial commitments mean that you can save more

The sooner you begin, the easier it will be to achieve your goals. Want to see just how powerful time and compounding can be? Check out this hypothetical example.

Set clear goals

Why are you investing? Take time to define and quantify your various goals.

Consider how much you need to save for each goal

Determine how much time you have to save for each goal

Prioritize your goals in order of importance

Our Goal-Setting Worksheet will help you get started.

By owning a broad array of investments in each asset class, you reduce the likelihood of one single underperforming stock or bond negatively impacting your portfolio. It’s a great way to create a balance between risk and return.

Diversify your risk

Diversification is key to sound investing.1 One of the simplest ways to achieve it is through effective asset allocation.2

There are 4 main asset classes — each with its own unique risk profile.



Cash Equivalents

(such as money market funds and U.S. Treasury bills)

Safe. Lets you be nimble whenever investment opportunities arise. Holds value during market downturns. Avoids having to sell off investments if unexpected expenses arise.

Offer little to no investment growth potential. Unable to keep pace with inflation.

Fixed Income

(loans to a company, government or agency for a set time period and interest rate; maturities can range from one day to 30 years)

Less volatile than stocks. May guarantee a return of principal plus interest if held to maturity.

Traditionally delivers lower returns than stocks. Inflation can erode the value of the principal over time. Bond prices fall when interest rates are rising.


(ownership stakes in a company)

Greater historical growth than bonds or cash. Dividends (where applicable) provide additional returns.

External market and economic factors can cause volatile price swings not related to performance of the underlying company.


(such as real estate, commodities, hedge funds)

Help diversify a portfolio because they tend to behave differently from stocks and bonds. Access to some high cost alternatives can be gained through less expensive exchange-traded funds (ETFs) and mutual funds.

Many alternatives (hedge funds, commodities, real estate, artwork) may be difficult to value and are generally more illiquid long-term investments.

Avoid concentrated stock

Maybe you’ve accumulated a lot of your employer’s stock through option grants and 401(k) allocations. Perhaps one or two of your investments have wildly outperformed the rest of your portfolio. Whatever the case, having too much of your portfolio concentrated in just a few stocks can be extremely risky.

4 ‘de-risking’ strategies

Stock Sale

Reduce overall portfolio risk by selling some shares and diversifying into other investments.


Mitigate some of your risk through various option strategies (for example, writing covered calls or establishing collars).

Exchange Funds

A group of investors coming together to pool concentrated stock holdings with each individual owning a share of the pooled fund proportionate to their contribution.

Charitable Gifts

Contribute shares to a donor advised fund (DAF), charitable trust, or directly to a recognized charity to help de-risk your portfolio while gaining a tax deduction.

6 rules of successful investing


  1. Start with a specific, clearly defined goal.
  2. Accept that some risks will be necessary to reach your goals.
  3. Be consistent in setting aside money each month to invest.
  4. Keep a long-term perspective; don’t make decisions based on short-term fluctuations.
  5. Take more risk with long-term goals and less with short-term goals.
  6. Consider opening a separate savings account to hold funds earmarked for investing.

Get started

Trusted advice can get you moving in the right direction. Your financial team is ready to work closely with you to develop and implement an investment strategy specifically aligned with your goals.

When investing, there is always the potential to lose money. Before you invest, make sure you understand the possible risks and rewards of the investments you'reconsidering.

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