When you're first strarting out, investing can feel daunting. The strange words and new concepts can be off-putting. But remember, when it comes to your finances, the biggest risk of all is doing nothing. Here are five steps to get you going.

1. Ground yourself in the basics.
   Investing doesn't have to be complicated. Before you or your teen begins, make sure you both understand the ABCs of stocks, bonds and cash investments.
2. Create a strategy.
   Have your teen set goals and determine a comfort level with risk. Use this information to determine his or her asset mix.
3. Diversify, diversify, diversify.
   You know the saying: Don't put all of your eggs in one basket.  Be sure your teens understand the need to diversify investments across and within asset classes. And remember that one of the simplest ways to diversify is with mutual funds.
4. Monitor the results.
   Make sure your teens keep an eye on results, periodically comparing their investment returns against the appropriate benchmarks.
5. Rebalance periodically.
   Asset classes and industry sectors perform differently over time, which means your portfolio's mix may get out of whack. For instance, a
    

   To find out whether a custodial account might be a good choice for you and your teen, read Custodial Accounts at a Glance.
   portfolio that's designed to include 80% stock mutual funds and 20% bond mutual funds could shift to 85% stocks and 15% bonds if stocks significantly outperform bonds for a period of time. Selling 5% of the stock portion of the portfolio and reinvesting it in the bond portion ensures that your teen is sticking to the target asset mix. It also provides a disciplined approach to selling high and buying low. Another approach to consider if your teen is making regular deposits to an investment account is to invest the new investments in the asset class that's underweight, according to the target mix. This way your teen can rebalance without having to sell assets. Work together as a family to periodically rebalance, once or twice a year, and stay on track.

 

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than original cost.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of savings and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction or strategy for his or her own particular situation. The examples mentioned are for informational purposes only and not intended to represent results you should expect in the future. Data contained here is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.