New to investing? Discover why investing may be good for your bottom line!
If you’re tired of hearing varying strategies and opinions on investing, you’re not alone. Whatever strategy you choose, one thing is certain: An investment plan that truly works for you, makes the whole thing a lot more fun – and profitable!
Considering the many different ways you can invest your money, how do you determine which strategy will work for you? Read on to find out.
The First and Only Investing Strategy You’ll Ever Need
A wise investing strategy must incorporate a blend of personal preferences and financial goals. Here’s how to go about it.
Dealing with stock nervousness
If investing in stocks makes you anxious, begin with a conservative approach, such as dividend or value investing. It’s a safe strategy in that the steady trickle of cash-flow from dividend stocks and the robustness of value stocks ensure some degree of stability even during market downturns.
Now is the time to invest
The younger you get your hand on investing, the more you can afford to make risky decisions. For example, if you’re in your 20s, you can focus on high-risk, high-yield small-cap stocks. Later on, as you get closer to your goal, you can employ more conservative strategies. In effect you’re balancing risks and stability.
Many investors would recommend a particular strategy. Well if it works for them that’s fine. As for you, your strategy is to focus on what works for you based on your financial goals and preferences. Besides, if you own a well-diversified portfolio, you’d probably be employing a dozen or so strategies. Over time, you’ll learn which of these strategies work best for you.
Remember, the only investing strategy you’ll ever need is the one that takes you to your goal.
Pros and Cons of Investing
While investing is a great way to achieve financial freedom, it has its advantages and disadvantages. By choosing your investments wisely, you should be able to get back your capital in no time and watch your money grow.
Cons of investing:
- Investing ties up your money for 5 to 10 years.
- It may make you anxious about losing your investments
- Stocks could rise and fall. You could end up with less money than you invested
So if you can’t afford to put away your money during the next 5 years or so, this may not be the right time for you to invest.
However, when it comes to finances there is such a thing as being “too safe.” Simply placing your money in bank savings isn’t risk-free either. If you don’t ever invest, there’s a chance inflation could eat up your savings sooner or later.
Pros of investing:
- Investing your money is an effective way to fight inflation
- Stocks always beat cash
- Dividends give you income
- Potential for long term growth
- You have a choice on how much you’re willing to risk
So if you’re afraid to invest, we understand. It’s always daunting the first time. However, it may be the fastest way to achieve your financial goals.
Besides, you get lots of FREE Help and Advice here. Take care.