4 Investing Tips You Need to Know
Building a great investment portfolio takes a lot of work. In order to create the perfect blend of dividend producers, growth assets, and fast movers that will breathe electricity into your holdings you need to do a lot of research and utilize some of the industry’s best tools for stock and commodity picking.
Research is the bedrock of a great investment strategy, but adding in market metrics and tools that generate greater levels of success are crucial to long term growth that will provide for the financial freedom that you hope to attain for yourself and your family. With these four tips you can start to piece together your next great investment portfolio that will launch your financial standing and investment income to a new level of success.
1. Leverage is an investor’s best friend, but use it cautiously.
Leverage, and particularly cash gained from a lender, is something that permeates the entire investment industry. From real estate to leveraged stock market trading options, capital borrowed from a lender is an investor’s best friend. Still, hard money loans, heightened interest rates, and the repayment obligations associated with traditional loans and other lender arrangements must be understood in context.
A hard money lender is a lender who is seeking to make a return on their investment as well. These lenders offer cash to investors so that they can purchase hard assets, like a new real estate property or bullion holdings. However, these loans are backed by hard assets—often the borrower’s personal residence. If you, as a borrower, fail to pay this debt back in full, you could be out the cash you’ve put back into the debt as well as your home.
Understanding the subtraction from your overall capital gains that debt obligations create is the first step to getting this borrowing option right. If you are earning an exponentially higher return as a result of the increased capital, borrowing to gain additional purchasing power might be the smart play. However, a hard money loan, leveraged purchasing opportunities, and other traditional loans aren’t right for everyone.
2. Practice portfolio diversification as a hard and fast rule.
Diversification is one of the most important facets of a robust portfolio. Rebalancing your holdings on a quarterly or even monthly basis is essential to staying true to your principles and the strategy that has brought you this far already. Building a portfolio that spans asset classes and industrial sectors takes a careful eye for detail, but it’s the only way to ensure that your holdings will survive contact with the inevitability of market volatility.
As well as diversification of asset classes, it’s a great idea to build a portfolio that attacks market segments through different lenses as well. Two areas in which this is easily accomplished is in the gold and real estate asset groupings. Gold bullion is one of the most versatile hedging instruments that investors rely on for strength in a down market. Still, ownership of gold coins or bullion bars comes with a problem unique to the precious metals, art, and other collectible assets. Owners must safeguard their portfolios against physical threats, whereas a password and challenge questions are used to protect brokerage accounts and other assets from incursions.
Adding stock holdings in the gold market as a secondary approach to this commodity asset is a great way to bolster your portfolio with this investment opportunity. Reading into companies like Alamos Gold is a great way to find investments here. Searching for “Alamos Gold in Turkey” grants data on the newest mining projects in Kirazli and in other sites across the Republic of Turkey that will boost Alamos’ position as an industry leader in North America (in addition to Alamos’ locations in the United States and Canada at the Young-Davidson, Mulatos, and Island Gold Mine projects).
3. Branch into new territories, such as cryptocurrency.
Cryptocurrency is another asset class that provides investors with excellent returns. That being said, in order to take advantage of the benefits granted here you will have to learn about a new asset class and begin to submit trades in a new environment. New territories, such as crypto transactions, come along with a learning curve, to be sure, but the opportunities presented in the world of crypto are worth the expense of your time and energy.
Coinbase, Binance, and other crypto exchanges make the onboarding of new investors who’ve never traded cryptocurrencies before far easier than you might think as well. With the learning platform additions, Coinbase and their competitors make entrance into this new market a breeze. Yet investors will still need to use a Coinbase tax calculator in order to ensure that they are IRS compliant with their crypto investments and capital gains disclosures each tax year.
4. Don’t be afraid of change. Instead, embrace it.
Finally, it’s crucial to understand that investing is a mobile process. Each quarter, year, and decade offers new and evolving investment opportunities for those engaged with the market. No matter what types of investments get your heart rate moving, it’s in your best interest to remain on the cutting edge of the asset class’ continued evolutions. This is the best and only way to ensure that your investments are always moving in a positive direction toward a stable financial future.