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A. Monitoring your investment

1. Get your yearly check up.

You might have noticed that one of the reminders you signed up for in your profile was a yearly check on your investments. This is important because the financial world is always changing and so are your circumstances. Just as an annual check up with your doctor can help you spot small problems before they become big problems or help you stay on the right path to wellness, a yearly look at your savings and investments can help you fine tune your financial plan and ensure that you will get to your goal. If you are starting out, this means looking at your savings -- maybe it's time to think about investing. If you are already investing, look at your portfolio to see if you are diversified and meeting your targets. If you are an employee, this means contacting your Human Resources department to see that you are taking advantage of company provided saving and investing instruments. It's all about keeping at the top of your game.

2. Understand risk.

Risk is a part of life. Every time we get in a car we risk getting into an accident because of something we or someone else does. There are ways to mitigate that risk: learning to drive safely, driving defensively, not allowing distractions. The same is true of investing. Some risk is worthwhile: if you keep your savings in a sock under your mattress you can almost guarantee it will still be there in a year. However you will have only the money you started with, no interest, no dividends and inflation might make that money worth less. The key is to understand how much risk you want to take and letting that guide you to make the right financial decisions. Everyone's risk tolerance is different, but this chapter in the Basics of Savings and Investing from IPT will help you understand risk and what is right for you.

3. Ask questions.

If you are utilizing a financial professional learn to ask questions about her recommendations. If you've been doing your homework, you will know what you already have in your portfolio and you can ask how new investment instruments will fit in that mix. If you are doing it by yourself, ask those same questions and then do the research to get the answers. Become an empowered investor, one who knows what they want and how they want to get there. Knowledge leads to confidence and the ability to make wise decisions. Wise decisions lead to a secure financial future.

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