Putting some of your hard-earned money and savings into an investment strategy is one of the best ways to prepare yourself for the future, and if done right, can be an extremely fruitful endeavour. However, with so many different investment strategies out there, and of course the amount of different risks and factors involved, for the beginner it can seem like a daunting undertaking trying to figure out what’s going to be best.
Interested in pursuing an investment strategy and want to build up a financial portfolio, but unsure of where to start? For your inspiration, we’ve prepared a short guide with some steps that you might want to take in ensuring your investment portfolio is secure. Read on to find out more!
Assess the volatility of the market
There are a wide range of asset classes in investment, and a huge number of ways that you can choose to invest your money. This can be anything from as simple as tapping a button on your phone that rounds up your purchases to the nearest pound, to a full-scale property investment with a management company handling tenancies on your behalf. Depending on the amount of capital that you have available, and the type of investment strategy that you are most interested in, you should try to find a strategy that works for you.
Stocks and shares, for example, while potentially fruitful for the investor with a keen eye, might not be the right fit for someone that doesn’t have a lot of time on their hands, as the prices tend to fluctuate quite frequently. Property investment is a good example of an asset class as a secure, long term investment, with the buyer owning a physical property rather than just shares that are represented on screen. In their many different guides to investment and buy to let investment in particular, RWinvest state the demand for housing in the UK at the moment, presenting a wealth of opportunity for those wanting to benefit from nationwide regeneration and development going forward.
Diversifying your portfolio
If you already have a couple of investments under your belt, and are trying to think of which route to take next, or how to make sure that you continue your success, one sage piece of advice that many influential figures and success stories will give you is to diversify. Not only will having a diversified investment portfolio allow you the potential of achieving success on multiple fronts simultaneously, but it will also help to protect your finances should one of the different strategies take an unforeseen turn for the worse. If you had investments in the property market, for example, what this might entail would be having properties in two different cities (such as Liverpool and Manchester), so that you can benefit from the developing markets in both.
Tip – Of course, while you might have knowledge in a certain area, diversification doesn’t just apply to differences within one asset class. Perhaps the most robust and long-standing investment profiles are those that have a densely packed mixture of different asset classes, from small stocks and micro investments to large-scale property developments for the future.