Allocating Resources for Investment

How much money you have (or want) to invest plays a big part in what your portfolio will look like. If you do not have much, you may at first be limited to only a few investment choices. Conversely, if you have plenty of discretionary cash, you are open to a much wider choice of investments.

Your entire net worth is invested in one way or another. An important step for all investors is to determine their net worth. Take inventory of all the valuable things you own. Subtract your debts. What's left is your net worth. You can use your net worth to gauge your risk tolerance for additional investments. You may also be surprised to learn how you have your assets allocated.

You can use this information to determine how much capital to invest and how to allocate it.

This article provided by The Educated Investor and powered by CalcXML.
© 2000-2008 Precision Information LLC. All rights reserved.
Click here to license this content.