Investing Made Easy

Your success on the tennis court has included many short- and long-term goals, and your financial success off the court requires the same. One key short-term goal is creating a spending and saving plan so you are prepared for any ups and downs. Once you have that plan in place, it’s time to think about long-term goals and longer-term investments that will allow the money you earn today to grow over time.

Saving vs. Investing

Saving and investing are both ways to potentially grow your income over time, but they do have important differences. 

Saving is best for money you plan to use in the next 5-7 years. There are many ways to save, which each work best for different circumstances. For example, a traditional savings account through your bank keeps your money easily accessible, but is unlikely to offer meaningful growth over time. If you’re interested in a savings account that allows you to earn some interest, consider a high-yield savings account. For larger expenses like a vacation or purchasing a car, you may want to consider money market accounts or certificates of deposit (CDs), which can earn interest over time but typically come with some withdrawal limitations. 

Investing is designed to help you secure your financial future by purchasing assets, like stocks or bonds, that have the potential to increase in value over time. Investments are connected to financial markets, meaning your account values can change depending on how your investments are performing on any given day. Once you start investing, you’ll build up an investment portfolio, which will include all of your financial assets. A Financial Advisor can help you determine the right investment strategy for your long-term goals, such as buying a home, getting married, saving for education, starting a business, or preparing for retirement.

Investment Basics

When you’re ready to start investing, your Financial Advisor is likely to recommend some assets common to most portfolios.

Stocks, which allow you to own a part of a publicly traded company. Depending on changes in a stock’s value, you may earn returns or experience losses. Common types of stock include: 

• Blue-chip stocks, which are issued by large, financially sound companies, and which typically have a history of delivering reliable returns.
• Mid-cap and small-cap stocks, which are typically issued by smaller, newer companies. Some of these companies may have a higher potential for growth, but can be riskier investments. 

Bonds, which are essentially loans to a government or company. Bond investors typically earn interest for a specified period of time on the money they have invested. At the end of that period, also known as a “maturity date,” the money is generally returned to the investor.

Investment funds, such as mutual funds and exchange-traded funds (ETFs), essentially pool the money of many investors, then buy and sell a variety of investment options. The concept of holding different types of stocks, bonds or other assets in this way is called “diversification”, and it is generally recommended to reduce investors’ risk. Because different investments may perform well in different market conditions, holding a variety of investments spreads out the risk, so investment fund managers look for opportunities for gains regardless of market conditions.

Making the Right Choices for You

Deciding on the right combination of investments for you can be challenging for new—or even experienced—investors. Seeking advice from an experienced advisor can help you better evaluate which investment options may be right for you and create an investment plan tailored to your individual needs and circumstances.

An important consideration is determining your “risk appetite,” which means how much risk you are willing to take when you invest your money. As a professional tennis player, you’re used to performing under pressure and taking chances, but your approach to investing may be entirely different. A Financial Advisor can help you gauge your comfort level and create a portfolio with a mix of investments designed to help you achieve your goals.

Personalized Financial Advice

Build a plan to help you navigate your complex financial decisions and achieve the future you want, with a Morgan Stanley Global Sports and Entertainment Financial Advisor dedicated to serving the needs of professional athletes.

Start the conversation: whatmovesyou@morganstanley.com