What's in this Guide?
As you start investing in the stock market, you'll notice that there are a lot of different opinions on what you should be doing.
The most common paths that people choose in order to invest their money are covered in this guide.
Here is a summary of what you'll learn in this guide:
- Basics of the Permanent Portfolio
- The Growth Portfolio
- The Income Portfolio
- The Conservative Portfolio
- The Jazzy Portfolio
- Investment Risks
- How to Get Ready to Start Investing
What to Consider Before Picking a Strategy
The Best Investment Strategies for Beginners
If you are just starting to invest your money, you might have a lot of questions. Questions like “what is the best investment strategy for a beginner?”, “should I do my own research or listen to the advice of a financial planner?”, “should I invest in individual stocks or mutual funds?”, “should I put all of my money into one investment or spread my money around?” and many more.
This is a common scenario for first-time investors and, with a well-thought strategy, it can also be a positive step towards investing success.
Investment Advice for Less With Robo Advisors
Because of this developing technology, a new breed of financial advisor, robo-advisors, has taken the financial services market by storm. These robo-advisors often offer investment advice for less than a traditional financial advisor.
Robo-advisors specialize in low-cost and liquid investment portfolios, often including ETFs. They also offer advice regarding long-term financial planning. These advisors often allow you to link up your accounts to their software to generate a cohesive financial profile that can help individuals and businesses gain clarity on their financial future.
Most robo-advisors allow you to create a custom portfolio based on your own individual risk tolerance and investment objectives. They use a risk-based analysis to recommend a tailored financial plan to help you reach your investments goals. Some market themselves as providing investment advice for less in order to compete in the space.
To determine what type of financial advice you’re looking for, you may want to consider your financial objectives. Are you working on short-term savings goals, such as paying for college tuition or buying a house? Or are you looking for more long-term financial advice? You may also want to consider how much you are willing to invest in relation to the level of investment advice you’re looking for.
Diversification With Commission-Free ETFs
One way to protect your assets while maximizing gains is through diversification. That could mean stocks might be shifting to bonds, or perhaps bonds are moving toward cash. Staying on top of your investments is the key.
If you're a newcomer to the world of investing, picking the right mix of investments may seem like a challenge. Never fear, here's a little trick to get started.
While balancing the allure of growth against the safety of guaranteed income, invest in portfolio of exchange traded funds (ETFs).
An ETF is like an index fund made easy. They are somewhat like index mutual funds but more flexible. ETFs can be traded like stocks and can be easily bought or sold throughout the day.
ETFs are either fixed income or equity based and can be used in a variety of strategies.
When diversifying your portfolio with ETFs there are a number of different ways you can go.
Types of ETFs
ETFs can be broken down into three types based on its underlying index.
There are many ways to invest using ETFs, but three of the best include fundamental map, industry rotation and index rotation.
This is perhaps the most simple of portfolio strategies and involves spreading your money around a diverse group of sectors.
Lend Money to Your Peers
If you have excess money you are looking to lend, there is an option that may not have occurred to you. Peer to peer lending in the US is a rapidly growing industry, thanks in part to the latest recession. Lending Club and Prosper are two of the most popular lending platforms that allow lending of excess cash in an attempt to grow a portfolio without the hassle of the stock exchange.
It is not without some risks, and as such it is only for those who are prepared to accept the risks and are willing to have the cash tied up until the investment matures. However, the returns can be very high, especially for investors that are willing to take larger amounts, riskier loans.
You could also try lending money on a smaller scale to friends and family. Although the interest there is likely to be less, you’re also much more likely to be repaid.
Become a Real Estate Mogul
Depending on which real estate investment strategy you decide to implement, there are many different factors that will have a direct impact on your bottom line, including the type of investment, the amount of time you are willing or able to spend working with real estate properties, your existing skills and knowledge, and, of course, your budget.
Investing in Real Estate can be very rewarding; however, it can also be very challenging depending on the types of properties you choose.
You could buy a single family home, with the idea that you would rent it out to someone who would make monthly payments that cover your costs and some of your profit.
This would be known as an income property and would be a passive income property. You would not be living in the home that you’re renting to an individual and you would only get involved in the process of managing the property when someone was interested in renting it.
As mentioned above, there are many different types of real estate investments available to you today.
Which ones are the right ones for you?
It’s more important to understand your goals and how they align with your skills and abilities than get locked into an investment property strategy that is very difficult for you to maintain and manage.
Here are the main categories of real estate investments:
- Investor or trader
- Buy and hold
Safe Returns From CDs
- Types Of CD Accounts
- FDIC Insured
- Non-FDIC Insured
- Are CDs Profitable?
- The Cap Exceptions
- Early Withdrawal Penalties
- CD Ladders
- Selecting The Best CD Accounts
- How To Shop For The Best CD Accounts
- Finding The Best CD Rates
- The Lowest Annual Percentage Rates
- The Lowest Minimum Balance
- The Lowest Fees
- The Most Efficient Customer Service
- The Best CD Promotions
- Comparing The Best CD Rates
A Little Goes a Long Way With Microsavings
There’s a saying that “a little bit of money goes a long way.” This couldn’t be truer when it comes to personal finance. Many people ask, “Do I really need to save?” when they don’t have extra money to sock away in the bank. But simply saving a little bit of money each month can mean the difference between being financially comfortable for life and permanently broke.
So how do you save even if you don’t have any extra income each month? The trick is in microsavings. It’s a concept that’s simple to understand, but difficult to execute. It involves making small budget adjustments in your daily life so that you can save small amounts of disposable income each month. Then you roll it into an easy-to-access savings account. Then, you use that money to save up for something big that you would normally put off.
Multiply that small amount by twelve months, and you’ve got a big chunk of money that’s enough for an emergency vacation, a new car, or to pay off a large amount of debt.
If you’ve read the entire report, you probably don’t think I’m talking about your kind of investment, but maybe it is. Nothing is more certain than the fact that there are people who are certain that they are right.
But experience alone destroys certainty and nothing replaces it entirely.
Economists and historians have formulated what they call the Law of the Conservation of Ignorance, which is that no one ever learns anything. This law actually applies to the stock market and any other market, not just ignorance. When the market is going up and you believe you know how it will definitely still be going up until retirement, you’re completely ignorant.
The best way to become a successful investor is to throw yourself into it, at least a little bit, to test your ideas and to have your acquired knowledge challenged. Even the most experienced investors are forced to question their beliefs and adjust their strategies. But you can’t become experienced if you never make a single investment.
If you’ve ever “invested” in anything, you’re already an investor. This book has been published on the principle that if you’re going to be an investor, you should be an investor who makes money.