Having a portfolio investment financial plan is important for achieving your financial goals. Once you create your individual plan, it is also important to stick with it, and not let your emotions get you off track. Your plan should be realistic and complete so you are able to act on it. Make adjustments when you need it but stay with the plan to reach your goal.

Decide how much you are able to invest over time. Part of a good plan is knowing how much returns your are expecting on your investments. It is also important to decide which tools you are going to use to do this. There are many investment tools out there to help with this.

Some prefer to go with a professional service. Find a reputable one that will take the time to listen to your goals and help you achieve them. Others may choose to invest on their own using an online investment account. A combination of the two can also be a part of a solid plan.

One should know the difference between their long and short term financial ambitions. Planning for retirement or for a college education is a long term plan likewise planning for a vacation or for holiday spending money is frequently in the short term.

Know the amount of risk you are taking with your money. Do your homework on the securities you are investing in and manage your risk accordingly. Hedging is a tactic that allows the investor to protect their assets by using options or even shorting a stock when needed. Always keep a diversified portfolio as this also hedges against loss. None of these tactics should be tried without proper education in them first. Knowing what you are doing is key to safeguarding you returns and keeping risk down.

When you diversify your portfolio you are not pouring all your money into one stock. That can be disastrous for if something happens and that one stock goes down you have great losses. But diversifying can protect you from that situation. If you buy several stocks in different sectors of the market then you are safer from a downturn in any one sector.

When you have a good financial plan set up you can figure out what is important to you and make decisions to reach your goals. You will know what takes precedence in your decisions and keep your eye on the ball. A solid plan also helps eliminate bad decisions based on emotion not the plan. Setting up a sensible and achievable plan on track with your income is a positive step in the right direction.