Let’s face it: Investing your hard-earned money can be a scary thing. Whether you’re experiencing a volatile stock market or dealing with unforeseen expenses from an income property, the uncertainty of your money’s future can be troubling. However, investing has become a necessity for many as an additional way to build a nest egg to retire comfortably in the future.
Investing is risky business, but with the right financial tools and plan, the rewards can outweigh the risks.
- Devise a Strategy: There are many ways to invest your money, including stocks, bonds, real estate or becoming an entrepreneur by starting your own business. It’s important to understand the risks and opportunities associated with each investment. By developing your goals and objectives – both short-term and long-term – you’ll be able to identify a variety of paths you can take when building your investment portfolio.
- Diversify Your Investments: We’ve all heard the saying, “Don’t put your eggs in one basket.” The same concept applies to investment opportunities. Creating a diverse portfolio – whether it's bonds, equities, etc. – will allow you to take risks while still maintaining a safety net within your investments. Consider experimenting with both a conservative and aggressive portfolio to understand the pros and cons to each strategy.
- Invest in Companies You Deal With: Investing in companies you’re familiar with, i.e. you use their product or services, will give you a better understanding of how their stock will perform in the market. The fact that you’re a long-time customer and have substantial background knowledge of the brand shows that the company has built a strong reputation and has proved itself in the marketplace.
- It’s OK to Fail: Not all investments are smart investments. That’s why diversifying your portfolio is essential, as your safe investments can cover any financial hits made by your riskier or more aggressive investments. Take a step back and evaluate where your investment strategy went wrong. Learning from your mistakes will help you grow as an investor and gain a greater understanding of how the market operates.
Investing is a marathon, not a sprint, so it’s important to be committed to it for the long haul. A CERTIFIED FINANCIAL PLANNER™ professional can help you navigate your questions and overcome challenges or mistakes, and will help you devote your time and resources to pursue opportunities that will allow you to retire worry-free.