As the end of the year approaches and we head into a new decade, there is no better time to look toward the future. The investment market is ever-changing, so rather than sit back and watch your investments, be proactive to protect and improve your wealth.
There’s no telling how the markets will shift, so whether you’re a seasoned investor or this is the year you are getting started, here are nine ways to help you create wealth and protect your investments in 2020.
1. Do the research.
Regardless of how long you’ve been an investor, research is crucial for staying on top. Your investment options are practically endless: stocks, bonds, mutual funds, real estate, hedge funds, etc. But it’s not enough just to know what’s available; you must know the market, as well. Learn the risks of different asset classes, and see which would fit into your investment plan.
2. Know your threshold.
As you build your investment plan for next year, make sure you know how much you are willing to risk. That number determines what type of assets you may want to invest in. The riskier the investment, the higher the payout — and the loss. Determine how much you can part with, and keep that number in mind.
3. Have a balanced portfolio.
You can even out high-risk investing by countering it with more secure options. Steady, long-term investments pull in a stream of income that can allow you to take a few risks. And it’s a good idea to have a variety of investments, as that can grant you extra security. If one investment doesn’t do well, you have others to fall back on.
One way to do this is to select a slow-growing, long-term option or two and pair that with something a little higher risk. For example, you could invest in private lending, draw up a contract and have a steady income stream coming in over the course of the loan. At the same time, you could also invest in stocks, cryptocurrency or other higher-risk assets.
4. Keep a close watch on trends.
If you want to stay ahead with your investments, keep an eye on market trends. Doing so can help you take advantage of shifts and know when to move your finances around and allocate your funds to investments that are on the rise.
Be vigilant so you can make cuts in areas that can potentially lose money. However, don’t make choices based on emotion. Do the research first, and make an informed decision before moving your funds.
5. Know your personal finances.
Much like the market, our personal finances change. Are you now close to retiring? Have you recently bought a house or found a new job? This is the perfect time to examine your finances and plan for the coming months.
Keep track of what funds are going in and out. If you don’t have an idea of your personal worth, it can be hard to create and protect any wealth.
6. Don’t overextend yourself.
While spreading out your investments is a good strategy to protect your wealth, it can be detrimental if you spread yourself too thin. When you have money in too many spots or too much money in one spot, your investments may not experience enough growth.
For instance, if you buy a money pit of a real estate investment and pour all your money there, you won’t experience the growth needed to sustain your savings. Likewise, if you invest in multiple stocks, mutual funds, real estate and several other options, you might experience less growth with your money spread so thin. Variety is important, but you need to maintain a balance so your account is in the green.
You also want it to be manageable. If you have too many investments, it could be difficult to keep an eye on everything.
7. Trim the fat.
Another way to protect your wealth and accumulate savings is by trimming the fat. This could be cutting out additional expenses that are draining your bank account or getting rid of an investment that isn’t bringing in enough cash.
The goal of investing is to help put you in the green now and for retirement. You can’t gain money by grappling with debts and assets that cost you more than they are worth. Be aware of your finances, and make changes whenever necessary.
8. Don’t wait.
Investing based on emotion is never good; however, waiting too long for anything is a sure way to miss out. If you haven’t started investing, there’s no time like the present. The longer you invest, the more time you have to accumulate wealth, especially if you keep on top of your portfolio and the market.
9. Make a plan.
Whether you are just getting started with your investments or you are a veteran investor preparing for a new year, it’s wise to have a game plan. While it’s a good idea to have a long-term goal, setting small, manageable goals can really help you work your way up.
For example, you could set a monetary goal you want to reach by a certain date or a goal to invest more in your portfolio. Small, realistic goals such as these can help you build momentum. Similarly, this can work in other areas of your financials. Set a goal to have a debt paid off in two or three years or to save extra to invest in a higher-priced asset.
Creating and protecting your wealth takes time, dedication and a flexible plan. But with the right research, proper monitoring and enough diversity, you can achieve your investment goals. You hold the key to your investment future.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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