By: Megan Makuck, Fall 2017 IAC Student Intern
Once upon a time, there was a girl named Goldilocks. She went for a walk through the stock market. Pretty soon, she came upon a financial institution. She knocked and, when no one answered, she walked right in.
In the conference room, there were three different investment portfolios. Goldilocks was hungry to invest. She looked at the risk-levels of each portfolio. After looking through the first portfolio, she exclaimed, “This portfolio is way too risky for me!”
So, she looked through the second portfolio.
“This portfolio is way too conservative for me,” she said.
So, she looked at the last portfolio.
“Ahhh, this risk-level is just right for me,” she said happily.
After she looked through the risk-levels of each portfolio, she looked at the time horizons of the three. Goldilocks looked at the first portfolio.
“This portfolio is way too short-term for me!” she exclaimed.
So she looked through the second portfolio.
“This portfolio is way too long-term for me!” she whined.
So she tried the last portfolio.
“Ahhh this time-horizon is just right for me,” she sighed.
By this time, Goldilocks was very tired, so she spent a little while longer looking through the portfolio objectives.
She looked at the first portfolio, which focused too much on generating income. She turned to the second portfolio, which focused too much on preserving wealth. She examined the third portfolio.
“Ahhh, this investment objective is just right for me,” she stated relieved.
Goldilocks was so tired from looking through the portfolios that she fell asleep in the chair. As she was sleeping, the three investors re-entered the conference room.
“Someone’s been looking at my portfolio’s risk-level!” the first investor exclaimed.
“Someone’s been looking at my portfolio’s time horizon!” shouted the second investor.
“Someone’s been looking at my portfolio’s objectives!” declared the third investor.
Just as they began to look around the conference room, Goldilocks woke up. She screamed, ran out of the office, and never returned.
Moral: It is important that your investment portfolio matches your own custom needs and objectives. FINRA explains what investors need to know about their investment profiles.