If you are planning for your financial future, it is very important that you learn everything that you can about the investment world and its inner workings. Since the savviest investors are the ones that leave with all of the spoils, you need to become an investor that knows the best strategies in the industry. Having said this, here are 6 strategies that you can use to build your investment portfolio.
- Hire a Financial Planner to Advise You
To make sure you have the support and the advice that you need to move forward, one of the first things that you need to do is hire a Newcastle financial planning advice to help you with devising a profitable investment strategy. Because these are professionals that possess the knowledge, experience, and expertise to look at your personal profile and your financial capabilities, they are already familiar with how to apply what they have learned to your financial situation. The information that they provide can help you determine which investments are suitable for your portfolio as well as those that may not be a financial help to you.
- Pay Special Attention to the Cost of Fees
The goal of building your own portfolio is to make money and to grow your investments. Though the cost of most of any type of investment opportunity may have some expense that you may or may not know about in advance, you should always keep track of the growing fees that you pay. For instance, if you are going to keep the cost low, you need to watch for the investment fees that can easily add up. Here’s a list of the most common
- Sales loads
- Mutual fund expense ratio
- Brokerage commissions
Even though the cost may not be much on the front end, many years down the road, you may be paying hundreds of thousands in expensive unwanted fees.
- Investments Need to Be Tax Efficient
Where you place your investment funds today should be a very critical part of your strategy. Since not all investments are the same nor seen as the most profitable or beneficial options, you need to know which investment will give you the best advantages. For instance, a Roth IRA and 401k are different and not the same as other investment opportunities since they are seen as tax shelters for those who are planning their retirement. So, they can be an excellent investment for tax purposes alone. On the other hand, other investments may be very costly in the long run due to high tax percentages that have to be paid. Simply put, you need to know what you will owe IRS at the end of the year.
- Keep Asset cost to a Reasonable Price – Never OverPay
If you are investing in any type of asset (land, houses and etc), you need to make sure that you are paying a reasonable price before you make your investment. Even though some assets may appear to be a great buy, this is not always the case if you pay more than it is really worth. You should also know if the value will depreciate or appreciate over a period of time.
- Avoid Investing in High Turnover Investments
When you begin to make investments, pay special attention to what you are investing your money and time into. One of the most important is to avoid high turnover investments. For instance, you do not want to buy a business that you do not plan to own or operate for at least 5 years or more.
- Make Sure You Define Clear Goals and Objectives
When you create your strategies, one of the most important things that you can do is to make sure that you define clear goals and objectives. Since the strategy that you use will determine how financially secure you will be today and the future, you need to make sure that you have set clear goals and objectives well in advance. For instance, if you need money in the future to buy a new home, start a business, retire at a specific age, you need to clearly define these objectives so that you can remain on target with everything that you do.
Eric Reyes is a passionate thought leader having been featured in 50 distinguished online and offline platforms. His passion and knowledge in Finance and Business made him a sought after contributor providing valuable insights to his readers. You can find him reading a book and discussing current events in his spare time.