What Can Investors Learn from Cyclists?

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May is National Bike Month. Of course, millions of Americans enjoy biking, so there's reason to celebrate. But even if you're not much of a rider, you can apply some of the guidelines and lessons of bicycling to other areas of your life – such as investing.

Consider taking some of these ideas for a spin:

• Tune up your portfolio. When bicyclists tune up their bikes, they adjust their brakes, clean and lubricate the chain, tighten nuts and bolts, and check the tire pressure, among other tasks. Such a tune-up keeps their bikes running smoothly and reduces the chances for breakdowns. And by "tuning up" your investment portfolio, you can help it stay in line with your goals and risk tolerance, while also preparing it for a "breakdown" in the financial markets, in the form of sharp downturns. To tune up your portfolio, look for ways to increase diversification, which can help reduce the effects of volatility, and watch for investments that may have chronically under-performed or are no longer suitable for your risk tolerance. You might be better off selling these and using the proceeds to invest in new opportunities.

• Know when to shift gears. Bicyclists move into higher or lower gears in response to changing road conditions and elevations. As an investor, you, too, may need to "shift gears" or adjust your investment strategy when your personal financial environment changes. So, for example, in the years immediately preceding your retirement, you may want to move some – but certainly not all – of your investment dollars from growth-oriented vehicles to income-producing ones. That way, you can lock in some of the gains you may have achieved while lowering your portfolio's overall risk level. This is important, because once you reach retirement and you need to start withdrawing from your retirement accounts – which essentially means liquidating some of your investments –  you don't want to worry too much about having to sell when prices are down. However, keep in mind that, even during retirement, you’ll need some growth potential in your holdings to help yourself stay ahead of inflation.

• Protect yourself. Smart bicyclists always wear their helmets – they know that an unexpected bump in the road could cause a dangerous spill. And on the journey toward financial security for yourself and your family, you can also expect that some hard knocks could come your way – which is why you need the proper protection. To safeguard your family in case anything should happen to you, you must have the appropriate amount of life insurance. And to help ensure your financial independence – and avoid becoming a potential burden to your grown children – you may want to consider some type of long-term care coverage, which can help cover many of the costs of a lengthy nursing home stay. You could choose a long-term care insurance policy or a "hybrid" policy, which combines long-term care protection with the death benefit of traditional life insurance. A financial advisor can recommend the option that’s most suitable for your needs.

You may want to observe National Bike Month by taking a few rides yourself. But in any case, making these cycling-inspired moves can help you keep rolling along toward your financial goals.

This article was written by Edward Jones for use by your local Edward Jones financial advisor. Courtesy of Rob Adams, 71 Main Street, North Adams, MA 01247, 413-664-9253.. Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. For more information, see EdwardJones.com.

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Isaias to Bring Rain, Wind to Northeast

A tropical storm warning has been issued for Massachusetts and Connecticut as now-Hurricane Isaias was nearing landfall along the Carolinas' coasts. Rain in the region is expected to start during the night on Monday and continue through Wednesday.
 
"Along and just northwest of the I-95 corridor of the mid-Atlantic and southern New England, heavy windblown rain with embedded thunderstorms will be the central theme from Isaias," AccuWeather Northeast weather expert Elliot Abrams said on Monday. 
 
Isaias is expected to make landfall Monday night as a Category 1 and shift inland, with Accuweather saying the eye of what should then be a tropical storm moving north over the Berkshires by late Tuesday. The National Weather Service in Albany is says it will impact southeast New York by Tuesday night and New England by early Wednesday morning. 
 
"Confidence is increasing with respect to the magnitude of local hazards and impacts," according to NWS. "Locally heavy rainfall and gusty winds are the main impacts from Tropical Storm Isaias."
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