Whether you’ve always dreamed of being a big-shot investor or after coming into some unexpected funds you’ve decided to turn your hand to investing, the chances are that as a newbie investor you’re feeling a little overwhelmed. After all, there’s a lot more to investing than you might think, which is why if you are serious about making a success within the investment sector, it’s so crucial that you know what steps you need to take.
Believe it or not, it is possible to hack your way to investment success, it’s just a case of ensuring that you follow the right advice. Bearing that in mind, below is a guide to all of the best hacks for investment success as a newbie investor.
Cost is crucial
When approaching an investment, what many investors do is focus on the potential return. However, what it’s also vital that you do is consider the cost of making the investment. Not just in terms of the amount that you are planning on investing, but also any other associated costs. You need to consider whether the cost that comes with the investment makes it worthwhile or whether you could spend your money somewhere else and achieve a better result.
A handy hack is not to use an in-person advisor service, as these can be quite expensive. Instead, swap to using a low-cost robo advisor, like Betterment, for instance. While advisors usually take upwards of 1% of any investment, Betterment fees come in at 0.2%, which makes them much more affordable. Plus, automated systems like this provide investment advice that considers the investment with the best financial outcome and the least risk.
Don’t be afraid to diversify
A mistake that many new investors make is sticking with one area of investment when actually it’s beneficial to diversify your investments slightly. By investing in a range of different things, you are not only giving yourself a higher chance of getting a good payout, but you are also decreasing your risk of losing your funds. It’s like the old saying goes, never put all of your eggs in one basket.
If you’re not sure how to diversify, speak to a financial advisor. Or, better yet to save money, use a robo advisor service and see what this service recommends that you invest in. Never just randomly invest, make sure that every penny you part with has a well thought out plan behind its investment. Otherwise, you are simply throwing money away.
Ignore past returns
It’s easy to look at past returns that a certain investment has brought in for you or another investor and assume that you can get the same return again. However, this isn’t the case – that’s why it’s crucial that you always ignore past returns.
Succeeding in the investment industry isn’t always easy to do, but if you are smart about the steps that you take when it comes to your investments, you can increase your chances of success. Take note of the tips above and implement them, and you should see your success soar.