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If you want to send your children or grandchildren to college, retire comfortably and achieve other important life goals, you will have to invest — it's that simple. But the process of investing can sometimes seem anything but simple. What can you do to gain confidence that you are making the right investment moves?

The answer may depend on how involved you want to be with your investment decisions. Initially, you might think that you would like to be totally "hands on." After all, how you save and invest your money is unquestionably a highly personal matter. And once you start exploring the investment world, you may find it fascinating, as it entails virtually every human endeavor imaginable: business, politics, science, the environment, and so on. But if you want to completely run your own show, you will need to put in a lot of work — such as studying the financial markets, staying up-to-date on changing investment environments and monitoring your portfolio to make sure it is still appropriate for your financial needs and goals.

Most people find that they do not have the time or expertise to manage this investment process on their own, which is why they turn to professional financial advisors. The key advantage in working with an advisor is that he or she knows your risk tolerance, goals and family situation, and can help you create a personalized, long-term investment strategy. A good financial advisor will communicate with you regularly and make recommendations. A financial advisor can offer you a variety of strategies and types of investments — such as stocks, bonds and mutual funds — to help you work toward your goals. Ultimately, though, you will be the one to make the "buy" or "sell" decisions.

Some investors prefer to leave even the buy-and-sell decisions to professionals. Most financial advisors offer advisory programs that take care of this for you. With these programs, you choose a professionally managed portfolio of investments. The programs typically offer a wide range of portfolios, so you can choose one that's appropriate based on your needs, goals and risk tolerance. Each portfolio contains a broad range of investments that are selected by professional analysts and represent a variety of asset classes. Advisory programs also offer a sophisticated rebalancing process designed to keep your assets allocated appropriately, which can help keep you on track toward your specific financial goals.

Whether you choose to make your own decisions in consultation with a financial advisor or to invest in an advisory program — or both — you really should learn as much as possible about your investments. Whichever method you decide is best for you, remember that investing involves risk, and investment performance is never guaranteed. So make sure you're asking the right questions, such as: What are the risk characteristics? How has a particular investment vehicle performed relative to others in its category? What are the tax implications of owning and selling a specific investment vehicle? What are the costs and fees associated with each choice?

As you may have heard many times, knowledge is power — and that's certainly true in the investment arena.


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