Investments are a tricky business. You have to secure yourself at every turn. Since there are so many moving parts, there is no telling where the next challenge could come from. Growth in technology and communications, from services like Charter Spectrum Internet, have made things convenient for investors.
Keeping updated on the progress of your investments is now easier and more efficient. Ensuring that you are getting the best return for your investment is not always easy. Growing your investment portfolio can take days or it can take years. Luckily, there are strategies you can deploy to help you improve your investment gains.
Here are 7 strategies to help you get the most from your investments.
7 Tactics to Gain the Most from Your Investments
It can be difficult to maintain peace of mind when you invest your hard-earned money into a portfolio. Especially if that portfolio is not enjoying the effects of a bull market. You are constantly thinking of ways to improve your ROI. Luckily, these tips can help.
Here are 7 Tips to help you gain the most from your investment.
- Look at the Bigger Picture
- Focus on Your Investment
- Trust That You Know Best
- Save Taxes, Where You Can
- Rebalancing is Key
- Lower Your Costs
#1. Look at the Bigger Picture
Remember, Rome wasn’t built in a day. Just like a good wine, your investment will yield better results long term. During all the excitement of bull markets, it is easy to forget about the most important law of business.
Bull markets are perfect for short-term investments and those who want to learn. But serious investors know better. The right investment will always be a long-term investment.
By investing in an Index fund which yields an average ROI of 8% over 30 years, if you invest $10,000 per year, you walk away with nearly $1.25 million. That’s a smart investment.
#2. Focus on Your Investment
From time to time your portfolio will require you to make contributions. Don’t think that you are throwing good money after bad. A portfolio can grow radically through a combination of gains and contributions.
You should rarely allow the influence of your contributions by the market. Usually, both bull and bear markets affect portfolio contributions. During bull markets, high investment returns satisfy your ambitions.
This leads to decreases in further contributions towards increasing your portfolio. While in bear market conditions, you can be inclined to protect your savings and deny further contributions to your portfolio. Both conditions are counter-productive in the long-term growth of your portfolio.
#3. Trust That You Know Best
It is important to observe ‘experts’ and know what the market is trending towards, but always trust yourself. If your analysis or your gut is telling you to stay the course, do it. If it’s telling you to go with the market trend, then follow the heard.
While listening to ‘expert’ advice proves lucrative for some, they are probably not in it for the long run. The only way to be successful and increase your portfolio over the long-term is to know that you are in control of it.
#4. Save Taxes Where You Can
No, this does not mean fraud. Income taxes on your investment returns can have a significant impact on your portfolio. One of the best ways to avoid excessive taxes on your investment returns is to stay clear of heavy trading.
Heavy trading can cause capital gains, resulting in heavy capital gains taxes. Try investing in funds. Especially those, which are index-based exchange traded funds (ETFs). Since these funds trade less than mutual funds, it minimizes your capital gains.
#5. Rebalancing is Key
Rebalancing means you correct your portfolio to return to the original level of diversification. You made a plan when you started your portfolio, stick to it. If you planned to break down your portfolio as 50 percent invested in stocks, 30 percent invested in bonds and 20 percent as cash then stay the course. At regular intervals, balance your portfolio. Revert it back to your original allocation.
During bull markets, it can be difficult to refrain from increasing your stock allocation. While increased stock allocation is great for your portfolio gains, it can have terrible effects when the bull market ends. And it will most definitely end. Markets fall faster than they rise. Being prepared for the fall, make your portfolio gains better in the long-term.
#7. Lower Your Costs
During bull markets, since you are making a lot of investment gains, it becomes easier to bare investment expenses. In the long run, however, these expenses can add up to a significant amount. It is always advisable to stay on the lookout for online brokers, which have lower annual fees and transaction costs. Choosing no-load funds over individual securities can significantly lower your costs as well.
If you operate through your home office, it is advisable to make sure your computer and networking system is backed-up regularly. You don’t want to lose out on trade simply because your system froze or your network gave up on you.
Getting in touch Customer Care, or with your service providers, to ask about networking back-up options is a good idea. It is imperative that you are constantly watching out for your investments. The only way to ensure investment gains is by actively working on your portfolio.