Younger people typically look for growth investments, such as stocks, that have the potential to increase in value over the years.
However, if you will need to use the money you are investing within a few years, you may want to invest in income investments, which earn interest or dividends and are less risky.
Investment Objectives
Consider your investment objectives before investing. There are two broad categories of investment objectives:
Growth (capital appreciation)
Income (interest or dividends)
Younger investors usually invest for growth because they want their investments to have the potential to increase in value over the years. Retirees tend to invest for income because they no longer receive a paycheck.
The length of time before you will need the money you are investing, or your time horizon, is another important factor in determining what sort of investment is right for you. Usually, if your time horizon is short, you should be focusing less on growth because you want to take fewer chances with your money. Otherwise, you might be forced to sell your investment when its value is down.
