While you are bombarded with advice on how to make your money grow, financial skills should become a natural part of your lifestyle for your investment future. Some of these skills are; keep up to date on literature directly related to investing, business and market performance, and actively conversing with experts within the field. These are just some of the things that will help to transform anyone into a good investor and develop good financial habits.
Developing investment skills comes with continuous practice just like in every other thing we do in life. It takes commitment and drive to achieve.
Do you remember how hard it was to ride your bicycle initially?
How many times did you fall? But for every instance, you got up and tried again until you were proficient at riding.
Naturally, being a new investor, you are more susceptible to errors due lack of expertise and required skill-set that will cause you to stumble. Investing is never a gamble and as such, it should involve varying strategies to create positive yields for impressionable results.
Some strategies employed for improved investment quality and overall growth include but are not limited to the following:
- Never Procrastinate: Wealth can be lost within seconds and as a result, you should allow your money to work for you! Start investing now, if you are unsure, your advisor will guide you accordingly.
- Never Risk Capital: Do not place funds on unknown or limited avenues with a negative expectancy rate.
- Reinvest Profits: Once there is an exponential gain on an investment, funds gained should be re-worked within your portfolio to exceed your initial investment and passive income.
- Plan for loss: Ensure that the risks taken, and the losses endured are managed and under control to limit erosion of your portfolio.
Once these simple strategies have been employed, you can safely say you are on the right path to wealth generation. It therein shapes a positive future which changes your mindset to create questions such as; how much wealth can I accumulate over [X] period? What are the expected timelines for you to achieve your plans?
Investing is a balance of defensively and offensively plays that fortifies your portfolio in any given climate. As Murphy’s Law dictates “whatever can go wrong, will go wrong…”, your investments should be well structured to eliminate maximum risk exposure while being low enough to improve your potential to purchase and develop your portfolio.
Never build a portfolio that does not react well to market conditions. Oftentimes investors make the mistake of building robust portfolios with little to no possibility of liquidity. In garnering your experiences, certain hedge funds and/or bonds will pose the risk of illiquidity this limits flexibility to the market when there is an unfortunate event such as a crash. This will limit your ability to sell, ultimately losing capital or an opportunity to take gains and latitude within your portfolio. These decisions should be discussed with your advisor or financial institution as this could limit your views on investing thereafter.
Lastly, do not be deterred or negatively influenced by the costs associated with trade and management fees. These fees may seem high as a new investor and may hinder your judgement in deciding on a good investment. However, ensure to ask the following:
What are the returns and how does it correlate to the growth on capital?
Do they surpass or meet the expected results?
In most cases, the returns will be far greater and will leave you happy with your decision to pay them, creating that well needed balance!
Once all the above have been considered your investment future should be steadily aligned for wealth and continuous growth for future years.
If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.