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BUSINESS
OF MEDICINE

FINANCIAL

FOCUS

Match Short- and Long-Term Goals

with the Right Investments

By Elizabeth Olney

Not all investments are created equal. Some are better suited for principal upon the bond’s maturity (providing the issuer doesn’t de-
short-term goals, while others can help you build resources for ob- fault, which, with investment-grade bonds, is generally unlikely).
jectives far in the future. As an investor, then, one of your biggest For longer-term goals, such as college for your kids and a com-
challenges will be to match your short- and long-term goals with fortable retirement for yourself, it’s a different story. To achieve
the appropriate investment vehicles. How should you proceed? these goals – and especially for retirement – you generally need to
accumulate as much as you can. As a result, you need investments
For starters, identify your short- and with growth potential, which means you will need to consider stocks
long-term goals. and stock-based instruments. As mentioned above, stocks will al-
Your shorter-term goals will change throughout your life. When ways fluctuate in value, and they may be worth more or less than
you are starting out in your career, for example, you might aspire to your original investment when sold. However, building a portfolio
purchase a home in the next three to five years. Later on, though, with an investment mix that’s appropriate for your risk tolerance,
your biggest short-term objective might be to save enough money and that contains a reasonable amount of growth-oriented vehicles,
for a long tour of Europe – without racking up credit card debt. can potentially help you overcome short-term volatility and continue
As for long-term goals, your biggest one likely will be to enjoy a making progress toward your long-term goals.
comfortable retirement. But you may well have other long-term Plus, you have some attractive long-term options available. With
plans, too, such as sending your kids to college in 10 or 15 years. a 529 college savings plan, you can save for college and possibly
After you have a clear sense of your short- and long-term goals, achieve tax benefits, too. And by contributing regularly to your IRA
you can choose the right investments to help you meet them. Let’s and 401(k) or similar employer-sponsored plan, you can defer taxes
start with the shorter-term ones. When you’re saving for a down while spreading your dollars among a wide range of investments.
payment on a home or for an expensive European vacation, you But there’s one thing all long-term investments have in common:
want to make sure that a certain amount of money will be available You need patience and discipline to stick with them.
to you at a certain time. Consequently, you may want to avoid stocks So, there you have some ideas on short- and long-term investing.
or stock-based vehicles, which will constantly fluctuate in price, be- Keeping this distinction in mind when you invest can help boost your
cause you don’t want the value of your investment to be down at confidence that you’re making appropriate moves for all your goals.
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 Elizabeth Olney is a financial advisor with Edward Jones Investments. She
is designed to provide regular interest payments and return your full can be reached at Elizabeth.olney@edwardjones.com.

24 San Antonio Medicine • April 2018