Personal Finance Investment Tips
Investing can be tricky, as there are so many options and so many people giving you different advice on what to do. And it can be hard to tell what advice is wise and what could lose you your savings.
With this article, we’re not going to tell you what specifically to invest in and what not to. Rather, we will use this space to give you three of the most important things to keep in mind while choosing your investment strategy. Then, we will discuss the benefits of getting professional help with your personal investment strategy.
Diversify Your Portfolio
Have you ever heard the saying, “Don’t put all your eggs in one basket.”? Well that’s what “diversifying your portfolio” means. In other words, be sure to invest in a variety of different types of stocks and/or bonds to ensure it is impossible to lose everything based on one or two underperforming investments.
To illustrate, if you invest solely in Google and Apple and these two companies have a terrible year, you will lose a lot of money. On the other hand, if you invest in a variety of different tech stocks, as well as stocks from other industries, you will not suffer much from two of your stocks going down.
One of the most important rules about investing is to spread out and minimize your risk, which is what diversifying your portfolio accomplishes.
Invest in Mutual Funds
One of the best ways to diversify your portfolio is to invest in mutual funds. A mutual fund is a fund that is managed by a large investment company (such as Fidelity, Charles Schwab, etc…) and consists of a large group of stocks.
For example, a tech-related mutual fund may consist of dozens of different tech stocks. You can invest in this mutual fund and therefore be invested in small pieces of multiple companies’ stocks. Because most stocks tend to rise in value over time, this is a safe investment, as most of the stocks in the fund will increase in value. It is also a low-risk investment because if a few of the stocks underperform, the rest of the fund will still grow in value.
Don’t Try to Predict the Market
Predicting the market is impossible. In other words, it is impossible to be certain about which stocks will grow and which will not, and at what pace. Believe us, someone would have figured it out by now!
While the market is impossible to predict, we know what types of investments are usually safe and that most safe investments tend to grow in value over time. So, instead of trying to predict the market and buy and sell every day, invest your money in a diversified manner and sit back and let your stocks grow. It’s ok to make changes once in a while and reinvest your money on occasion, but do not try to predict the market on a daily basis. It will only drive you crazy.
Get Professional Help with Your Investment Strategy
As mentioned above, investing can be tricky. That being said, your investment strategy can make or break how much money you earn on your investments over the course of your life. So, we recommend getting professional help with your investment strategy to ensure you maximize your earning potential. And while you will of course have to pay a small price for this help, the amount you will make with a solid investment strategy will far outweigh the cost of an investment consultant.
If you need experienced and trustworthy investment consultants, please do not hesitate to reach out. We would be more than happy to speak with you about how we can help. Krowne Certified Public Accountants offers unparalleled financial guidance and professional services specifically tailored to our client’s needs.
Please feel free to reach out to us by filling out the form on our contact us page or via phone at 818-831-6075. We would love to discuss your situation and help you grow. We look forward to hearing from you.