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November 7 is Election Day. Across the country, people will vote for senators, congressional representatives, governors, mayors and a host of other offices and ballot initiatives. While big elections like this usually only take place once every couple of years, you will "vote" almost every day on any number of other issues related to your life. Some of the most important of these "elections" concern decisions affecting your financial situation - so you'll want to cast your ballot wisely.

So, what kind of investment-related issues should you vote on? Here are a few to consider?

  • Vote for suitable choices. Just as an informed voter needs to look beyond a 30-second commercial to really understand a candidate or an issue, a smart investor needs to go beyond the "hot tips" to grasp the suitability of a particular investment. Different investments are appropriate for different investors; to find the ones that are right for your individual needs, goals and risk tolerance, you will need to put some thought into your situation and the many investment choices available to you.
  • Vote for portfolio balance. Some voters reflexively vote for a single party or point of view. While voters may have their reasons, individual investors generally can't afford this imbalance when they are building a portfolio. If, for example, you only buy growth stocks representing a specific industry, you will likely be hurt when an economic downturn affects that sector. On the other hand, if you balance your growth stocks with income-oriented stocks, bonds, government securities and even certificates of deposit (CDs), you can potentially reduce your portfolio's volatility and give yourself more opportunities for success. This diversification does not guarantee a profit, nor does it protect against loss, however in investing, as in life, balance is essential.
  • Vote for long-term results. It's no secret that some political candidates pursue policies that are short-term in nature. While some of these policies may be beneficial, others are carried out at the expense of long-term solutions. As an investor, you, too, might have some short-term goals - such as saving for an expensive trip - but most of your important objectives will be long-term: saving for retirement, sending your children to college, etc. And to achieve these goals, you need to take a long-term approach to investing. That is, you need to buy quality investments and hold them for the long term, or at least until your needs change. Furthermore, you need to stick with your investment strategy despite short-term setbacks caused by political turmoil, high energy prices or other such factors.
  • Vote for professional help. When you vote for a political candidate, you want to have confidence that he or she is competent, honest and trustworthy, and has your interests at heart. Pretty much the same description could be applied to the financial professional you choose to help you make the right investment moves. Shop around for the right person, and ask your friends and relatives who they use. You may need to interview several professionals before selecting the right one, but the effort is worth it.

When you vote for a political candidate, sometimes you win and sometimes you lose. But when you "vote" for the right investment moves, you're always a winner.


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