Investment Planning

Building Today, Planning for the Future

Every investor has a different set of needs. A good investment strategy considers where you are today and helps you get to where you want to be tomorrow.

An experienced financial adviser can help you get there by understanding your attitude about investing, taking inventory your current assets and resources, and establishing a plan to meet your goals.

While you carefully consider what road is best for you, it's good to understand some of the investment options available to you.

IRA Funding

An IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis. There are several types of IRAs, each with different advantages:

  • Traditional IRA--You make contributions with money you may be able to deduct on your tax return, and any earnings can potentially grow tax-deferred until you withdraw them in retirement. Many retirees also find themselves in a lower tax bracket than they were in pre-retirement, so the tax-deferral means the money may be taxed at a lower rate.

  • Roth IRA- You make contributions with money you’ve already paid taxes on (after-tax), and your money may potentially grow tax-free, with tax-free withdrawals in retirement, provided that certain conditions are met.

  • Rollover IRA- A Traditional IRA intended for money "rolled over" from a qualified retirement plan. Rollovers involve moving eligible assets from an employer-sponsored plan, such as a 401(k) or 403(b), into an IRA.

  • 401(k) Plan- A 401(k) is a retirement savings plan offered by an employer. It lets workers save and invest a portion of their paycheck before taxes are taken out. You pay tax when the funds are withdrawn, typically at retirement age. 401(k) plans are part of a family of retirement plans known as defined contribution plans. Other defined contribution plans include profit sharing plans, IRAs and Simple IRAs, SEPs, and money purchase plans. They are called "defined contribution plans" because the amount that is contributed is defined either by the employee (a.k.a. the participant) or the employer.

Understanding Mutual Funds

A mutual fund is a company that makes investments on behalf of its owners (shareholders). When you buy shares of a mutual fund, your money is pooled with money from other shareholders. Professional money managers use the pool of money to invest in securities (stocks, bonds and other investment instruments) that fit a fund's specific objectives.

How do mutual funds make money for you?

ONE, the fund can pay dividends earned from its investments.

TWO, if fund managers sell a security held by the fund at a profit, the fund could pay capital gains (profits) to shareholders.

You can choose to receive dividends or capital gains in cash, or you can reinvest them in your fund to help your investment grow faster. The amount you receive is proportionate to the number of fund shares you own. The fund's average annual total return is a percentage that tells you how much you gained or lost on your investment for a given period of time. Whether you invest $1,000 or $10,000, you'll get the same rate of return.

Benefits of Investing in Mutual Funds

Mutual funds have a long history, dating from the 1920s, and are now one of the most popular forms of investing worldwide. But there are many pieces to the mutual fund investing pie, and before you become a mutual funds investor, you'll want to understand how all those pieces fit together and the potential benefits of investing in mutual funds.

Diversification--Your best protection against risk is diversification--spreading your investment across many securities and asset classes. Mutual Funds offer a variety of investment options to help you construct a diverse portfolio.

Professional Management--With mutual funds, you have built-in professional money managers who base their buying and selling decisions on extensive, ongoing financial trade and industry research.

Growth Potential--Mutual Funds allow for the possibility of higher long-term returns than traditional savings accounts.

Convenience--Mutual funds are easy to buy and give you a liquid asset because your money is easily accessible. Your shares may be redeemed at the net asset value any day the New York Stock Exchange is open. The price of shares sold may be more or less than their original cost, depending on the market conditions.


  • Automatic reinvestment--Most mutual funds allow you to automatically reinvest your dvidends or captial gains to purchase additional fund shares at no extra cost.

  • Exchange privilege--Within a fund family, you can generally move portions of your investment into other funds with different objectives as your financial situation changes, with no additional sales charge.

Setting Realistic Expectations

A key part of creating a successful investment plan is maintaining realistic expectations about your investments' performance. It's important to review your portfolio with your financial adviser periodically to accommodate your changing goals, especially when you have a major life change such as having a child or setting off into retirement. Whatever stage you are in life, it's never too late to start planning.

Need a little help in deciding which products and services would be right for you and your family? Please use the contact us button to e-mail us. We can help you analyze your needs and recommend appropriate products.


Mark Pratt is an agent licensed to sell insurance through New York Life Insurance Company and may be licensed with various other independent unaffiliated insurance companies in the states of AZ, CA (CA Insurance License #0669221), HI, ID, MT, NV, OR, RI, TX, VA, and WA. No insurance business may be conducted outside the states referenced.

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Mark Pratt is a Registered Representative of and offers securities products & services through NYLIFE Securities LLC, Member FINRA/SIPC, a licensed insurance agency, and a wholly-owned subsidiary of New York Life Insurance Company, 1756 Picasso Ave Ste B, Davis, CA, 95618, 530-753-4195. In this regard, this communication is strictly intended for individuals residing in the states of AR, AZ, CA, CO, FL, HI, ID, MT, NC, NJ, NV, OH, OR, RI, SC, TX, UT, VA, and WA. No offers may be made or accepted from any resident outside the specific states referenced.

Mark Pratt is also a Financial Adviser with Eagle Strategies LLC, a Registered Investment Adviser, and a wholly-owned subsidiary of New York Life Insurance Company, offering advisory services in the states of AR, AZ, CA, CO, FL, HI, ID, MT, NC, NJ, NV, OH, OR, RI, SC, TX, UT, VA, and WA. As such, these services are strictly intended for individuals residing in the states referenced.

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