The Best Investment Plans for 2021

After entering personal details regarding potential investment options, the website recommended that I take up the taxable investment mix, which would include a range of investment options, which would be beneficial at a personal level (Wealthfront, 2013). This paper discusses the recommendation given by wealth front and determines any possible changes that would be implemented.

In this recommendation, a 35% investment in local stocks and a 24% investment in foreign markets would be placed. Additionally, 18% would be invested in emerging markets while and equal 9% share is distributed to municipal bonds and dividend stocks. Five per cent would be devoted to natural resources. This allocation represents a total of 69% investment for both local and foreign markets, which although beneficial, could cause serious challenges in the case of a serious market downturn. As a result, only 50% overall investment would be done in markets as they are subject to fluctuations. This would mean in case of a serious downturn, the significant part of the investment would be lost.

With this contribution minimized, investment in dividend stocks would be increased as part of an income project throughout one’s life. The extra income would be beneficial, especially in the case where savings are required, as this would ease financial pressure. Increased investment of up to 30% would thus be ideal for this platform as it provides sufficient financial cushion and reduce pressure, especially foreseeing various steps of life including marriage and the demands of children.

In conclusion, the plan would be ideal. However, small adjustments in overall markets investment and dividend stocks would be good in view of future plans that would require higher risk aversion as compared to current states where maximum risk could be undertaken.

References

Wealthfront. (2013). Wealthfront’s New Investment Mix . Retrieved from Wealthfront: https://blog.wealthfront.com/tax-efficient-investments/