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3 Financial Tips Every New Investor Should Know

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We'll help you set goals, adopt a strategy, make investing a habit and control your risks.

You want a home of your own, an education for your kids, a comfortable retirement someday and a little fun along the way. These are the dreams we all seem to be born with. To achieve them, we must become investors.

A brilliantly executed program of saving -- putting your money into certificates of deposit, money-market funds or savings bonds -- can earn 5% to 6% in a good year. With inflation at 3% (some would say that's optimistic) and taxes taking away another 25% or so of what remains, that 5% return quickly becomes about 1.5%. You're going to have to do a lot better than that.

Investing in stocks will help you earn more. The stock market's dismal performance in the decade of the aughts has understandably caused investors to lose faith and lower expectations. But since 1926, Standard & Poor's 500-stockindex has gained 10% a year on average.

Over the long term, we think you can reasonably expect an average return of 7% to 9% per year on your investments. You won't make it every year, but that's an achievable range if you plan your approach thoughtfully and stick to your plan.

Successful investors don't jump around from one place to another according to what's hot and what's not. They operate from a plan that's based on their goals, how long they have to achieve them, their tolerance for risk (both financial and psychological), and what they can afford to set aside for an investment program. You want to make money, of course, but you also want to be able to sleep at night. Here's how to do it.

  • Set Goals and Adopt a Strategy
    Decide what you want to save for and how much you need; then, figure out how you'll do it.
  • Make Investing a Habit
    Follow these easy steps to make investing part of your daily routine.
  • Control Your Risks
    Don't invest until you’re ready, and don't buy anything you don't understand.

© All contents copyright The Kiplinger Washington Editors.

SunTrust Private Wealth Management is a marketing name used by SunTrust Banks, Inc. and the following affiliates: Banking and trust products and services are provided by SunTrust Bank. Securities, insurance (including annuities and certain life insurance products) and other investment products and services are offered by SunTrust Investment Services, Inc., a SEC registered broker/dealer and a member of the FINRA and SIPC. Other insurance products and services are offered by SunTrust Insurance Services, Inc., a licensed insurance agency. Investment advisory products registered with the SEC.

SunTrust Bank and its affiliates and the directors, officers, employees and agents of SunTrust Bank and its affiliates (collectively, “SunTrust”) are not permitted to give legal or tax advice.  While SunTrust can assist clients in the areas of estate and financial planning, only an attorney can draft legal documents, provide legal services and give legal advice.  Clients of SunTrust should consult with their legal and tax advisors prior to entering into any financial transaction or estate plan.  Because it cannot provide legal services or give legal advice, SunTrust’s services or advice relating to “estate planning” or “wealth transfer planning” are limited to (i) financial planning, multi-generational wealth planning, investment strategy, (ii) management of trust assets, investment management and trust administration, and (iii) working with the client’s legal and tax advisors in the implementation of an estate plan.

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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