You have set good goals, written an investment plan, selected benchmarks, and studied the various asset classes: you are now ready to begin picking specific assets for your portfolio. Picking financial assets is the next step in building a successful investment portfolio. Before you get started, you should recognize that this step cannot be completed in one day. In fact, it is likely that your portfolio will be most successful if you build it a little at a time by adding small amounts of money to your investments each month. In explaining how investing can help us become self-reliant, Elder L. Tom Perry said the following:

Be prudent, wise, and conservative in your investment programs. It is by consistently and regularly adding to your investments that you will build your emergency and retirement savings. This will add to your progress in becoming self-reliant. (“Becoming Self-Reliant,” Ensign, Nov. 1991, 64)

As Elder Perry states, you should strive to be prudent, wise, and conservative in your investing. The information provided in this section will help you to follow Elder Perry’s counsel as you pick securities for your investment portfolio.

When you have completed this section, you should be able to do the following:

1. Understand why you should wait to purchase individual stocks until your assets have grown.
2. Know how to find information on mutual funds and stocks.
3. Describe how to pick a good mutual fund.
4. Explain the value of purchasing an index fund or ETF.