Successful investing involves much more than just expecting a good return. In fact, it involves making the right choices to meet your current needs and future financial goals. Your current personal circumstances affect your investment decisions every step of the way. Whether you want to save for your child’s education, retirement, or a home, you should choose a plan that will help your money grow. This article provides six investment principles to follow.
- Know Yourself
- Get An Early Start
- Invest Regularly
- Build A Diverse Portfolio
- Monitor Your Portfolio
- Align Your Investments With Your Time Frames
People have different investment goals as well as different time frames for achieving these goals. Some goals are short term like saving for a car or vacation while some are long term like retirement. Gain some retirement investor insights here. On the other hand, all investors are not all that comfortable with the risk that comes with investment.
Even though risk seems like something to avoid, greater risk may provide the opportunity for greater rewards in the long term. The most important thing is to find the balance between risk and reward that you can be comfortable with. This is an important first step to successful investing. Your risk tolerance, investment objectives, investment time horizons, investment knowledge, approximate net worth, and gross annual income play an important part in growing as an investor. Speak to an expert at AJOT for investment advice.
Let “compounding” work in your favor when investing your hard-earned money. In fact, compounding is a form of money multiplying itself by way of earning a return on the existing return. Starting early will make it easier. Your portfolio’s asset allocation is the mix of investments within your portfolio. A diversified investment portfolio offers a great combination of savings, growth investments, and income.
It is much easier to allocate small amounts to invest on a weekly or monthly basis compared to making large lump-sum contributions. A regular investment plan will let you choose when and how often you make contributions – which makes your investment a priority. When you opt for a CIBC Investment Plan, money will be withdrawn from your existing account and re-invested in one of CIBC’s investment solutions. You can start investing with as little as $25 a month with this scheme.
How to lower the average cost of investing?
Investing small amounts in mutual funds over the long term helps with lower average costs than making infrequent investments. For example, you can purchase more units of a mutual fund when its prices are low as well as fewer units when the prices are high. You will profit from your purchases with short-term price declines provided the mutual fund gains in value in the long run.
The most effective way to reduce your risk and increase returns over the long term is to spread your assets across a wide range of investments. When you have a mix of different types of investments, it helps cushion your investment portfolio from downturns. In fact, the value of some of your investments may go up while others may go down.
Monitor your portfolio
Make sure to examine your investment portfolio with the help of a CIBC advisor. Do it at least once a year to make sure that your investment portfolio meets your unique needs. Life events, changing goals, and market conditions are cues to review your portfolio.
Align your investments with your time frames
Choose the right type of investments depending on whether you plan to save for the short term or long term. Consider long-term growth-oriented investments for your long-term goals. On the other hand, more accessible and more conservative investments are ideal for your short term goals. For example, if you plan to invest to save for a downpayment on a property, you will need quick and easy access to the funds when it is time to invest in a new house. These are important tips to consider when investing.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.