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There is no doubting the fact that times are changing. The year 2013 has brought with it a need for a massive overhaul of the way people park their surplus funds. The traditional principles that used to work to keep yourself profitable might not be all that effective anymore. Change is in the wind and the best way to deal with it is to alter your asset allocation strategy, find good investments and make sure you stay safe in the game. But the question is, for an average investor like you, who might not have his finger on the pulse of the market, how will you know what to invest in? One of the first things that you must understand is this change is here to stay. Therefore be prepared that the adjustments you are about to make in your ‘Good Investments Plan of Action’ is going to stay with you well beyond 2013. Next, you will need to figure out what your priorities are in terms of making investments. What feature would you like your investment vehicle to prominently exhibit? Is it safety, liquidity, growth, income or tax advantages? What are you looking for in good investments? And most importantly how long are you making this plan for? I mean do you expect to see returns in a short span of time or are you in for the long run? Make sure that you have these answers ready before you sit down to plan your investment strategy. Investment management firms have been recommending a 60:40 ratio for asset allocation for the past 30 years. When I talk about the ratio of 60:40 I mean investing 60% of your funds in stocks and the remaining 40% in bonds. Mutual funds have been the preferred investment vehicle up until now, considering their safety perspectives and the returns you can expect from them. This kept things quite simple, making sure that if one category of assets experienced losses, the other one would offset it with profit and growth. But as the year 2013 unfolds, the circumstances are suggesting it is time to review this ratio, going for a mix of assets that is a lot more conservative than the traditional, tried and tested approach. With the stock market doubling itself since 2009 (when the economic downfall began) and the bond prices exhibiting historical highs, you could not have asked for a tougher investment scenario. Americans in general are quite fed up with the continuing state of uncertainty that the market is displaying. Finding good investments in such an economic scenario is going to be challenging. The returns that you should expect from your funds should thus be adjusted accordingly. Going for safety and long term growth is one of the best ways to invest money right now. Asset diversification will prove to be your best friend. Ensure liquidity at all times to make the most of any opportunity for good investments that comes your way. And keep the risks to a moderate level. May this year prove to be a profitable one for you. About The Author Randall Wilkins has been following the markets for many years and offers great advice about the best ways to invest money to the people in general. His take on the current market scenario and expert investment tips can be found in the many articles and blogs that he writes.
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