Wins and losses are part and parcel of investing. If you want to become a successful investor, you will need to accept the fact you may experience some bad investments throughout your career. Yet there are some things you can do to prevent making a financial mistake. Here’s how you can effectively manage your investments in 2018.
Identify What You Want from Your Investments
Before you do anything, you must set some time aside to consider what you want from an investment. Knowing your needs, goals and appetite for risk will help you make an investment decision, so you don’t go too far outside your comfort zone.
Seek Expert Assistance
The stock market and investment opportunities can be rather complex, so it helps to have professional assistance and tools along the way. It might, therefore, be wise to seek expert help in the form of a robo-advisor, such as betterment automated investing, who also offer tax-loss harvesting, goal-based investing, and socially-responsible investing advice. It’s, therefore, a great place for beginners to set financial goals, short-term targets, and retirement objectives.
Determine How Long You Can Make an Investment
Once you have the management tools in place and identified your wants and needs, the next step will be to determine how long you can go without the investment money, which will help you to shortlist the various opportunities available. It will help you to identify the best risks for your budget.
For instance, are you planning to put down a house deposit within the next two to three years? If so, shares would not be the best opportunity, as their value will go up and down. You might, therefore, be better suited to investing your money into a cash ISA, which offers less risk but a healthy return in your desired period. Yet, if you’re saving for a pension that’s 25 years away, you can make long-term investments, such as stocks, shares, and financial ventures.
Take Baby Steps
Only fools rush in when investing. If you’re an investment rookie, you would be wise to take baby steps when entering the market. For instance, a low-risk investment, such as a cash ISA, can be a great starting point. Only then should you move on to medium risk investments, if you’re willing to embrace a little more market uncertainty.
Establish How Much Management Time You Have
You must also seriously consider how much time you have available to manage your investments. If you are hoping to be hands-on with investment opportunities, individual shares could be an ideal option, but you must aware of the risks involved – which is why you should seek the help of an expert. If you don’t have the will or the time for a hands-on approach, or if you only want to invest a small lump sum, an investment fund might be the right fit for you, as your money will be pooled with multiple investors to buy a wide range of investments.