Investment options for "small-dollar" investors

In the current struggling economy, many Americans see investing money and creating a healthy financial portfolio as a challenge that isn’t really possible until they have numerous assets or excess funds they know they won’t need in the near future. Some adults never feel the warmth of that security, and they’re left with few options in the face of retirement or sudden illness.

There may be a new source of investment help for these consumers, though. Although traditional investment firms may deny a client with less than $100,000 in readily available assets, other financial services are designed for the small-dollar investor.

For instance, SaveDaily is a private-label platform that enables brokerages, banks and non-traditional financial service providers to provide quality services to small-dollar and big-dollar investors alike. Investors have the ability to buy shares in virtually any mutual fund regardless of income, account size or activity.

The SaveDaily model allows account holders to invest in nationally recognized mutual funds with no minimums or transaction fees. This gives modest investors the chance to save some money for retirement or other big life events.

Here’s some investing advice from the financial advisors at SaveDaily:

* Know the risks associated with each type of investment. It’s important to know what risks to expect before diving into any investment. Will the value decline over time? Is there any chance you’ll lose what you invested? What’s the market risk or possibility of inflation?

* Organize finances between savings and investments. Savings is money that you might eventually need if emergencies arise, such as car repairs or medical bills. Or, perhaps you’re saving for a down payment on a house or new car. Investing that money might not be wise. Investments, on the other hand, should have a long-term timeline, usually going toward children’s education or retirement.

* Find a strategy for asset allocation. You’ve likely heard the term “portfolio diversification,” meaning your portfolio should have at least three different types of investments — primarily stocks, bonds and cash. The Journal of Accountancy reports that 94 percent of investment performance was the result of asset allocation. This strategy will change over the course of your life, but figuring out what percentage of your portfolio should be stocks and what should be bonds must be a high priority.