Investing can be incredibly rewarding. Knowing the basics of investing and having a plan will help you make the most of your money and ensure you are making smart decisions that will benefit your financial future. Here are some tips:
1. Establish a financial plan based on your goals.
- Be realistic about your goals
- Review your plan at least annually
- Make changes as your life circumstances change
2. Start saving and investing today.
- Maximize what you can afford to invest
- The sooner you invest, the more you can reinvest for compounding profits
- Don’t try to time the markets—it’s nearly impossible
3. Build a diversified portfolio based on your tolerance for risk.
- Know your comfort level with temporary losses
- Look outside the stock market to diversify
- Understand that asset classes behave differently
- Don’t chase past performance
4. Minimize fees and taxes
- Markets are uncertain; fees are certain
- Pay attention to net returns
- Minimize taxes to maximize returns
5. Build in protection against significant losses
- Modest temporary losses are okay, but recovery from significant losses can take years
- Use cash investments and bonds for diversification
- Consider alternative investments such as real estate, gold & silver, private money lending, etc.
6. Rebalance your portfolio regularly
- Be disciplined about your tolerance for risk
- Stay engaged with your investments
- Understand that asset classes behave differently
7. Ignore the noise
- Press makes noise to sell advertising
- Markets fluctuate
- Stay focused on your plan