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Making the right investment for what you want in the time you have

Not all investments are created equal. Some are better suited for short-term goals, while others can help you build resources for objectives far in the future.

As an investor, then, one of your biggest challenges will be to match your short- and long-term goals with the appropriate investment vehicles.

Brenda Merschdorf, Financial Adviser for Edward Jones was a recent guest on the CBS 58 News at 4 offering the following tips.

-- HOW DO YOU BEGIN TO FIND INVESTMENTS FOR YOUR SHORT- AND LONG-TERM GOALS?

For starters, identify your short- and long-term goals. Your shorter-term goals will change throughout your life. When you are starting out in your career, for example, you might aspire to purchase a home in the next three to five years. Later on, though, your biggest short-term objective might be to save enough money for a long tour of Europe - without racking up credit card debt.

As for long-term goals, your biggest one likely will be to enjoy a comfortable retirement. But you may well have other long-term plans, too, such as sending your kids to college in 10 or 15 years.

--WHAT TYPE OF INVESTMENTS ARE APPROPRIATE FOR SHORT-TERM GOALS?

After you have a clear sense of your short- and long-term goals, you can choose the right investments to help you meet them. Let's start with the shorter-term ones. When you're saving for a down payment on a home or for an expensive European vacation, you want to make sure that a certain amount of money will be available to you at a certain time. Consequently, you may want to avoid stocks or stock-based vehicles, which will constantly fluctuate in price, because you don't want the value of your investment to be down at the moment you need the money. Instead, for short-term goals, you may want to consider a fixed-income vehicle, such as a bond, which is designed to provide regular interest payments and return your full principal upon the bond's maturity (providing the issuer doesn't default, which, with investment-grade bonds, is generally unlikely).

--HOW ABOUT LONGER-TERM GOALS INVESTMENTS?

For longer-term goals, such as college for your kids and a comfortable retirement for yourself, it's a different story. To achieve these goals - and especially for retirement - you generally need to accumulate as much as you can. As a result, you need investments with growth potential, which means you will need to consider stocks and stock-based instruments. As mentioned above, stocks will always fluctuate in value, and they may be worth more or less than your original investment when sold. However, building a portfolio with an investment mix that's appropriate for your risk tolerance, and that contains a reasonable amount of growth-oriented vehicles, can potentially help you overcome short-term volatility and continue making progress toward your long-term goals.

Plus, you have some attractive long-term options available. With a 529 college savings plan, you can save for college and possibly achieve tax benefits, too. And by contributing regularly to your IRA and 401(k) or similar employer-sponsored plan, you can defer taxes while spreading your dollars among a wide range of investments. But there's one thing all long-term investments have in common: You need patience and discipline to stick with them.

So, there you have some ideas on short- and long-term investing. Keeping this distinction in mind when you invest can help boost your confidence that you're making appropriate moves for all your goals.

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