National nonprofit ACCC explains six basic investing principles consumers should consider to achieve financial goals
Boston, MA – November 15, 2019
Investments provide consumers with a variety of different tools to help achieve their financial goals. Starting the process of investing can be intimidating, but consumers who take the time to learn the fundamentals can gain traction on their short- and long-term financial goals. National nonprofit American Consumer Credit Counseling (ACCC) explains the basic fundamentals of investing.
“It is important that consumers take the time to learn basic investing principles to understand how their investments can benefit their financial future,” said Steve Trumble, President, and CEO of American Consumer Credit Counseling. “Setting realistic goals, understanding your risk tolerance and deciding how much you want to invest are essential first steps every investor should consider.”
According to Gallup, as of April 2019, 55 percent of Americans own stock. Before the 2008 recession, 62 percent of Americans held stock and has still not fully rebounded since.
ACCC explains the fundamentals of investing.
- Set goals – Before investing, consumers need to take the time to write down their goals. They should make a brief list of both short- and long-term goals. Short-term goals could include saving for two to five years for a big purchase. Long-term goals would consist of saving for more than five years, for example, saving for retirement or a home purchase.
- Assess risk tolerance – Every investment involves risk, and some are riskier than others. The higher the risk, the greater return, but that also means there is a higher chance a consumer could lose their money. Those with a high-risk tolerance are more willing to risk the loss of their money, whereas those with low-risk tolerance should look for investments that would preserve their original investment.
- Decide how much to invest – Deciding how much to invest depends on a consumer’s goals and when they would like to reach them. Firsttimers might consider investing about $100 per month and increasing as they see fit. For investments such as retirement, it is suggested that consumers invest about ten to 15 percent of their income each year.
- What kind of investment – There are several different types of investments that consumers can consider. Investment options include bonds, stocks, retirement, mutual funds, education, real estate, etc. It is important to understand all options and how much risk each carries.
- Diversification – Consumers should notput all their eggs in one basket when investing. They should consider diversifying between stocks, bonds, etc. to spread their risk based on their investment strategy.
- Discipline – Consumers should practice a disciplined approach when investing. It is important to stick to the strategy and focus on the long-term outlook rather than checking every day and making drastic changes based on the economic climate at that moment.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit https://www.consumercredit.com/debt-resources-tools/
