You work hard for your money. Investing allows your money to work hard for you by earning interest on what you save or by buying and selling assets that increase in value. Whether your financial goals include sending your children to college, a secure retirement plan, buying a home, traveling or any myriad of ambitions, investing may be essential to helping you reach them.
In order to determine what investment options might be the best for your given situation there are some basic yet important steps to follow.
1. Identify your goal(s) and time horizon.
2. Allocate a portion of your income for investing.
3. Work with your investment professional to determine how to best make your money work for you.
The difference between saving and investing
Saving and investing are two different concepts. Saving involves the protection and preservation of money from loss. Common methods for saving include bank savings accounts,
Certificates of Deposit,
U.S. Savings Bonds or money market accounts where you can expect to receive a rate of return that is tied to current short-term interest rates.
Investing, on the other hand, means making a long-term commitment to put money away and let it grow. Investing also involves risk; such as the fluctuation in value of your original investment and the fact that no return is guaranteed. However, over the long-term your investment is expected to move in an overall upward growth pattern. History shows that investing in the stock and bond markets provides greater returns than most investors can earn through savings.
| Growth of $1 Over Time
Historical performance of the major asset classes |
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Past performance is no guarantee of future results.
For illustrative purposes only and does not represent the performance of any Huntington Funds portfolio. It is not possible to invest directly in an index.
Although dollar-cost averaging can be a very effective way to build your portfolio over time, you should be aware that it doesn't ensure a profit nor prevent loss. You should also take a close look at your financial resources and assess whether you'll be able to contribute to your account on a regular basis. If you can manage to apply dollar-cost averaging to even a small amount of money, consider doing so. Even if you invest only a small amount on a regular basis, you still will be working in a very disciplined way that may help achieve your goals.
Source: Morningstar
Mutual funds are subject to risk and fluctuate in value. In return for their higher growth potential, stock prices are more volatile than those of bonds or Treasury bills. Unlike stocks and corporate bonds, government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest if held to maturity.
S&P 500 Index: An unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Barclays Capital Government (Long-Term) Index: An index composed of bonds issued by the U.S. government or its agencies which have at least $1 million outstanding in principal and which have maturities of ten years or longer. Index figures are total return figures calculated monthly.
Barclays Capital Credit Bond Index: Composed of all publicly issued, fixed-rate, non-convertible, investment-grade corporate debt. Issues are rated at least Baa by Moody’s Investors Service or BBB by Standard & Poor’s, if unrated by Moody’s. Collateralized Mortgage Obligations (CMOs) are not included. Total return comprises price appreciation/depreciation and income as a percentage of the original investment.
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