There are many different types of investment strategies out there, and what works for one person might not work for another. There are many different factors that go into determining what is the best investment strategy for yourself or for your family. From the age of the person starting their investing, to the target retirement age, to the person’s ability to tolerate risk, all of these issues play a major part in figuring out the ideal strategy for investing.
Learn About Your Investment Options
You should never just trust an investment professional to take your money, no questions asked, and allow them to just do their thing. While it is true that professional investors and financial specialists will have more tools, education, and training to succeed, that doesn’t mean you get let off the hook. If you want to have the best overall results from your investment practices, then you need to learn about the basics of what your investment options are, what risk is, and how to manage both. The more you know, the better your conversation will be with any financial specialists overseeing your retirement savings.
Balance Your Portfolio
Even if you have a high tolerance for risk, or a long time to build up your savings, you still want to have some degree of balance within your portfolio. If you have 100% bonds you will never see major growth in your funds. On the other hand, having 100% stocks can lead to wild swings in value that may hurt growth as well. Some degree of balance is necessary, no matter what your overall risk tolerance is.
Take Advantage of an Investment Match
If you work for an employer who gives you a 401(k) match then the simplest of all investment strategies is also one of the smartest: investing at least enough to get the full match from your employer. This is just common sense and as those magic funds get invested over time you will continue to profit and see your retirement savings grow at an even faster rate.
Make Retirement a Priority With Your Strategy
There’s no question that most people do not treat retirement savings as a major priority in their life, especially compared to basic everyday comforts like cable TV, two daily coffees from Starbucks, or a cell phone bill that you just accept without shopping around for a better plan. When retirement becomes your number one priority you will find that you will often go from “not having any money at all to invest” to suddenly realizing after a very short time that if you keep this up you can retire 10 or even 20 years early.
Remember Adjustments Not Overhaul
One of the most damaging investment strategies a person can adopt is to completely overhaul their investment portfolio every time there is a bump in the road. While not every trade can be a winner, and there are stocks and indexes that will fail you, normally minor adjustments are all it takes to calm your nerves and make sure you don’t miss out on the long-term growth for more volatile investments. Don’t overhaul your investment portfolio every time there’s a bump in the road. Make minor adjustments instead, and you’ll be much happier with the long-term results.