Financial Tip from Steve Sexton: The Three Worlds of Investing

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This week our trusted financial advisor Steve Sexton offers investing tips and strategies that can help you make the most out of your financial situation.

In order to formulate the perfect investment strategy for you, you must first understand risk. To hear what Steve had to say about risk and risk assesment, view last week’s financial tip.

In this financial tip, Steve explains that there are three worlds of investing. Each world has a different degree of risk and therefore varying degrees of growth and loss potential. Achieving the proper balance among your investments is key to solid financial planning.

The world of investing is broken into three categories: the safety world, the hybrid world, and the risk world. The “Safety World” consists of certificates of deposits, CDs, fixed interest annuities, and government bonds. The “Hybrid World” includes equity linked CDs and fixed interest annuities. The “Risk World” is made up of stocks, bonds, mutual funds, and variable annuities. Each world of risk has its own growth and loss potential, separate interest rates, and different levels of protection associated with them.

A proper financial plan should take into account your risk comfort level, that way you can balance your investments to ensure you have your money invested in a way that is suited specifically for you.

You can watch Steve from the Sexton Advisory Group every week on E&L TV, on San Diego Channel 4 at 11:00pm.

The Entertainer & Lifestyles Magazine has partnered with a top local financial expert to provide ongoing financial advisories. As part of the Entertainer’s continued commitment to San Diego’s financial wellbeing, Steve Sexton will continue to contribute and provide financial advice to our readers. Learn more about Steve Sexton on the Entertainer or tune in next week for another tip.

Photo from alancleaver 2000

San Diego resident for over 10 years, I now call this beautiful city home. Originally from the Bay Area, I'm a California girl at heart. I love the outdoors, fitness, food, and a good craft beer (from San Diego of course).

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