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Investment calculator: Realize the power of long-term savings

Saving and investing can be a powerful combination as you prepare for your future, but they're not one in the same. Saving helps you put money aside for important needs, whereas an investment strategy is designed to help you grow your savings and create income sources to fund your retirement and other financial goals.

To see the power of long-term saving and investing, check out Edward Jones investment calculator; just enter the initial investment amount, an estimated rate of return and how long you plan to invest.

Talk to an Edward Jones financial advisor to help you get started on the road to financial stability by saving and investing.

Tips for using Edward Jones investment calculator

If you're new to Edward Jones’ investment calculator, see the information below to learn how to use it.

Initial investment amount : In this section, input the amount of money you're investing. Try inputting different amounts and note you can add to your investments over time as you earn and save more money. The main purpose is to help you see the possibilities. Edit the calculator inputs as many times as you like.. Rate of return : For this section, choose the percent of return on your investment. Various investment types carry different rates of return , as well as levels of risk. Typically, the higher the risk, the higher the rate of return. Your Edward Jones financial advisor can help you understand the different types of investments and the related risks and returns. Length of investment : Enter the number of years you plan to keep your investment in your account. Compare the difference in growth if you start investing today compared to 10 years from now.

How does investing work?

Investing is using your money to buy assets, such as bonds, certificates of deposit , stocks, etc., that ideally increase in value, providing you additional income once you sell, withdraw or cash them in. Typically, the longer you keep your investment, the better your chances for growing it.

That’s why it’s important to work with an Edward Jones financial advisor, who will work to understand your goals and help you explore your different investment options to best meet your needs.

Types of investments

Edward Jones offers many options to save and invest, including these common types of investments .

Stocks : A stock is a share of a company. Stock ownership entitles the investor to certain benefits such as voting on some company decisions like stock splits, mergers, etc. Fixed-income investments : This group of investments include municipal bonds , corporate bonds , certificates of deposit (CDs), S. Treasuries and agency bonds . They pay a fixed amount at a specific time. Mutual funds : This investment fund is mutually owned by you and other investors. It allows investors to pool their money in stocks, bonds and other investments. Exchange-traded funds (ETF): An ETF is a fund that holds a variety of securities in one investment category or class. ETFs trade on an exchange, and their prices can fluctuate throughout the day.
Unit investment trusts (UIT): A UIT is a portfolio of professionally selected stocks or bonds with a stated expiration date. UITs are not actively traded. They generally have a low initial investment requirement.

Importance of diversification

Diversifying your investment portfolio is important for several reasons.

It helps you limit your portfolio volatility . By not owning too much of one type of investment, your eggs are in different baskets; in this case, they're in different asset classes, meaning they have varying levels of risk. Your Edward Jones financial advisor can help you align the right mix of assets to balance with your risk tolerance. Using a variety of investments , you and your Edward Jones financial advisor can develop an investment strategy to help meet your financial goals throughout your journey. Edward Jones has many options designed to help you get to where you want to go.

Whether it's during retirement or in your peak earning years, you can create a tax strategy using a mix of investments to help ensure your portfolio is tax efficient.  Diversification does not ensure a profit or protect against loss in a declining market.

Risks of not investing

Although saving for your future is critical, so is investing in your future. Choosing not to invest could mean failing to financially live the life you want or even retire on your terms. Investing helps you create a strategy designed to help grow your money. By working with an Edward Jones financial advisor, you'll have an experienced professional who can help you understand the options, develop a strategy and review and adjust your investments as needed to help keep you on track toward meeting your goals.

Key terms

It’s helpful to build a vocabulary understanding common financial terms used when saving and investing, including these common financial terms.

Rate of Return : The percentage increase or decrease in your initial investment’s value over a period of time. This helps investors understand how their investment performs. Annualized rate of return : The percentage increase or decrease in your initial investment’s value on a yearly basis, usually considered over several years. The rate provides a better indication of how an investment is performing long term. Market index : A measurement that tracks the performance of a specific type of security or basket of securities. Many times, a market index is used as a baseline to compare the performance of similar investments. Volatility : A measurement for the ups and downs of a security or index. Understanding the volatility of an investment can help investors determine the level of risk they should expect. Lower numbers mean more stability Standard deviation : This calculation is used to determine volatility. It measures the difference between the average price of a security against major ups and downs. If there are broad price gaps between the average and the high (or conversely the average and the low), the standard deviation would be a higher number than if the price gaps were smaller. For smaller gaps, the standard deviation would be lower, meaning the performance of the security is more predictable. Cost basis : This figure represents the cost of a security, investment, etc. It helps investors understand gains and losses, as well as tax consequences. Net investment cash flow : Total of all cash flow, including dividends, interest and reinvestments, less cash payouts, such as selling a security or not investing a dividend. Investment portfolio : A selection of investments owned by an investor. Diversified portfolio : An assortment of investments with varying degrees of returns and risks. This approach helps an investor avoid owning too much of one type of investment, which can increase risk.

How can Edward Jones help

Find an Edward Jones financial advisor today to help you start working toward your goals. Remember, the sooner you start investing, the longer your money will have the opportunity to grow.

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Important Information:

This calculator is for illustrative purposes only and does not reflect the performance of any specific investment. It does not take into account the deduction of any fees or taxes. There is no guarantee that the rate of return can actually be achieved. Investments offering the potential for higher rates or return also involve a higher degree of risk.

Diversification does not guarantee a profit or protect against loss in declining markets.

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This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. financial advisors. Edward Jones' U.S. financial advisors may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

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