Investing is something that many people would like to get started with, but shy away from due to feelings of nerves. Often, the main off-putting factor is that there’s no guarantee of a good return – and, of course, this is true to some extent. In the world of investing, very few things are ever predictable or guaranteed. However, there are some ways to improve your chances of success. From doing your research and monitoring the market to opting for diversified, balanced portfolio types, you can increase the odds that your investments will work out in your favour.
Diversify your portfolio
The first way to preserve your returns when investing is to diversify your portfolio as much as possible. Diversification essentially means spreading your investment capital around as many different vehicles and asset classes as possible. As an example, you may decide to focus 20% of your portfolio on cryptocurrencies, 50% on equities and the remaining 30% on property. If one of the classes to which you are exposed declines in value while others rise, then you won’t lose everything – and the impact on your return will hopefully be small.
Change your mindset
Another way that you can ensure that your investments don’t take a nose dive is by altering your mindset. Some traders start out with the best of intentions but end up slipping into a knee-jerk, emotional state in which they make trading decisions off the back of short-term dips in value rather than a long-term strategy. While not even time is a guarantee of a strong return, markets can earn their value back even after a significant drop – so it is often worth avoiding being too emotional and simply waiting for time to pass.
Do your research
In the investment world, information really is key. First off, you need to make sure that you know how your chosen investment vehicle works – and this will take research. If you’re involved in the world of stocks and shares, meanwhile, then taking out a subscription to Hammerstone’s “The Feed” is one way to find out the latest in earnings news, proprietary research and more. It’s also a good idea to pick up copies of newspapers such as the Financial Times (or, indeed, any broadsheet newspaper with a business section) in order to supplement your main information provider. By using your information provider to keep an eye on market-moving developments such as general elections and monetary policy decisions, you’ll be able to strike at the best possible time.
It’s important for all investors to remember that there’s no such thing as a guaranteed return. However, there are ways that a savvy trader can ensure that they have the best possible chance of success. Whether they employ strategies such as diversification or even just change their mindset, there are plenty of ways to make it as certain as possible that you’ll get a good return.