Maybe we’d like to buy an automobile or house within the next few years. With more time, we have more flexibility. Capital preservation or safety of the principal investment is still important, but, we’re in a better financial position to ride out economic downswings and diversify our portfolio while managing more risk. For intermediate-term goals, we consider intermediate-term instruments that potentially pay more. We consider CDs and registered investment company securities that invest in dividend paying stocks and investment-grade intermediate term bonds that don’t fluctuate much in prices. That gives us higher potential income, and opportunity for capital appreciation, as the markets increase in value, with reasonable protection against dropping securities prices.
Chris Bryant is an American financial advisor.