INVESTING

Roland Hancock, of Edward Jones, describes investing as “a journey”, one he helps guide individuals through.

Rolie Hancock is a financial advisor at the Edwards Jones office in Bainbridge. Hancock holds initial meetings with clients to establish an investment plan and works with recurring clients to assess their current plans.

According to Hancock, investing is putting your money to work now in assets to help increase its value for the future or help generate cash flow. It involves purchasing assets (stocks, bonds, etc.) that are expected to be worth more in the future and selling them for a profit.

Investing is a journey, and it takes a plan, according to Hancock. He helps individuals make one and works with them to invest in the right assets.

“It’s just like climbing a mountain,” Hancock said. “You’re going to go through valleys. There’s going to be highs and lows. But eventually, you’re going to get to the peak.”

Before making an investment plan, Hancock advises that a potential investor should set aside an emergency fund. The fund is a lump sum in a secure account that an investor can use in an emergency. Hancock said this ensures they are covered financially in unexpected costs or misfortune.

Having a goal for an investment plan is very important, according to Hancock. He said having a goal gives your money purpose. An investment goal can look like building a retirement or college fund, saving up for large costs such as car or house purchases, or supplementing extra income. Along with other goals, Hancock said one of the main reasons to invest is to keep up with inflation.

He explained that individuals can grow their money alongside inflation. Inflation increases at an average rate between three and four percent, meaning everything gets three to four percent more expensive yearly. Hancock said that investing allows individuals to grow their money at the same rate, negating the effects of inflation.

“If you’re going to be outside working, trying to earn a salary and provide for your family, you do not want your money just sitting there and not working for you just as hard as you are,” Hancock said.

Every investment plan has to have a defined duration. The duration of an investment plan gives it a framework to build a portfolio around and aids in prioritizing what kind of investments an individual should make. Hancock explained that individuals invest in different assets for different reasons. Some can yield short-term gain, while others are better for a long-term plan. Knowing the duration of an investment plan aids in creating the best portfolio.

Along with duration, risk plays a significant role in deciding what investments to make. Hancock explained that the market fluctuates, which means assets are constantly increasing or decreasing in value. Fluctuation can lead to your investments losing money at points during your investment plan.

Risk tolerance measures the degree of loss an investor is willing to endure. Knowing this, an investor can more accurately pick the best assets. Stocks, equity funds and exchange-traded funds (ETFs) are generally higher-risk options, while bonds, bond funds and income funds are lower-risk.

Once a potential investor has decided on a goal, duration and comfortable risk tolerance, it’s time to build a portfolio. A portfolio is a name for a collection of investments. An individual’s portfolio will be unique to them based on their investment plan.

Hancock advocates for individuals to diversify their portfolios. Diversifying is a concept centered around investing in different types of assets, assets of varying risk levels and durations. Hancock explained that diversifying a portfolio is a protective practice.

“You want to make sure to diversify because it’s going to help mitigate some of the risk,” he said. “There’s not one investment vehicle that is going to work well in every situation, … you want some that are performing well at certain times throughout the year. And then there’s going to be other times where it might underperform. But your other investments are performing well during that time.”

He explained that diversifying can also help a portfolio serve different purposes simultaneously. For example, a middleaged married person is looking to start investing. They want to have a portion of their portfolio for building a retirement fund. Equities assets, such as ETFs, would make up that portion. They also want to buy a new car within the next three years and would tailor part of their portfolio to reach that goal. They have bills and family expenses that they need help covering month to month. They would allocate part of their portfolio to short-term investments to help supplement their income. Diversifying a portfolio in this way is essential for accomplishing multiple investment goals.

Diligence is key to reaching investment goals, according to Hancock. He said making an investment plan a priority and contributing to it regularly will help an investor accomplish what they set out to.

“There are certain individuals where they’re very, very diligent with their budgeting, and they make it a priority to work towards those goals, and they’re going to pay themselves first before they worry about going out and purchasing something else.”

A final piece of advice Hancock gave was to check your portfolio sparingly. He explained that investing mostly grows money in the long term and that shortterm change will be minor and could even be negative. He said that checking a portfolio quarterly is a good plan and compared growing an investment plan to growing a tree.

“When you plant a tree, if you go out every day, you’re not going to be able to appreciate the growth that you see,” Hancock said. “When you go out every couple of months and look at it, you’re going to be able to appreciate how much it’s grown over time.”

Hancock said individuals looking to start investing can start with a financial advisor or on their own. A handful of investing apps and internet platforms enable individuals to invest personally and Investing resources are available through online searches and educational videos. Hancock advises individuals who invest on their own to be wellinformed about their investments before making them.

Nothing presented in this article shall constitute the provision of investment advice by Edward Jones or your employer sponsoring the article, and nothing provided or stated in the article should be interpreted as such.

In addition to and not in limitation of the foregoing disclaimer, Edward Jones will not provide investment advice regarding any specific security or mutual fund during this article and nothing should be interpreted as as such. No specific recommendations for the purchase or sale of any particular investment shall be deemed given to any readers of this article, and the mention of any particular security or investment is for example only.