Once you have a retirement plan in place, the next step is to develop an investment strategy with a diversified portfolio. A good investment strategy should be based on your long-term goals, risk tolerance, and time horizon. It should also take into account the different asset classes and investment vehicles available.
Asset classes refer to different types of investments, such as stocks, bonds, real estate, and commodities. Each asset class has its own level of risk and return potential, so it’s important to diversify your portfolio across multiple asset classes.
Investments can be managed actively or passively. Active management involves selecting individual stocks and bonds based on market trends and other factors. Passive management, on the other hand, involves investing in index funds or other funds that track a particular market index. Both strategies have their pros and cons, so it’s important to weigh the risks and rewards of each.