Whether you’re a seasoned veteran in investments, or just beginning to consider how to build your portfolio, we could all use a refresher on investing in the stock market.
In today’s day and age, it’s imperative to be aware of what’s happening in the stock market with interest rates and inflation on the rise and the impending risk of a recession. For these reasons, investing in today’s markets can be intimidating for both new investors and experienced investors alike.
In this month’s blog, we’ve provided a list of tips to give you new ideas or refresh your memory on some top tips for building your portfolio with confidence.
Top 10 Tips for Building Your Portfolio
- Set clear investment goals
Having clear investment goals will provide you with direction and focus to your investment strategy. These goals will provide a framework to help you make informed investment decisions while also keeping you motivated and on track.
- Diversify your investments
Diversifying your investments will help you build a resilient portfolio that minimizes risk where possible. By allocating funds to a variety of assets, if one takes a loss, the others will not be affected. This will allow you to have more security and confidence in your investments.
- Assess your risk tolerance
Continuously assess your risk tolerance to understand the amount of risk you’re comfortable with. Higher-risk investments may offer a greater return but also carry an increase in potential losses.
- Determine your investment horizon
An investment horizon is one of the key considerations when developing an investment portfolio. This can help determine which investment products are the most suitable for your personal situation. Typically, a short-term investment horizon requires a more conservative, low-risk approach, while a long-term investment horizon could allow you to introduce more risk considering there’s more time to recover if necessary.
- Conduct thorough research
If you’re interested in investing in specific assets or markets, conduct thorough research that includes historical performance, industry trends, company fundamentals, and economic indicators to help you make informed decisions.
- Be mindful of current events
Being informed of current events is a game-changer when it comes to investment decision-making. The stock market is a complex system that is affected by external factors beyond our control. The best way to prepare for these unexpected changes is to be mindful of the current events that could impact your current or future investments.
- Review your portfolio regularly
While you want to avoid overanalyzing your portfolio, make sure you’re reviewing your portfolio regularly. Consistent portfolio management will help you to maintain your desired risk level and ensure you are continuously aligned with your investment goals.
- Consider dollar-cost averaging
This strategy involves investing equal amounts of money at regular intervals. The potential benefit of this is that it can reduce the effects of price volatility and lower the average cost per share.
- Stay organized
Building long-term financial success and a balanced portfolio takes time and patience.
- Seek professional advice
Seeking professional advice from experienced financial advisors can give you the guidance you need when making investment decisions. Working with a private wealth management firm such as RaeLipskie can provide you with personalized recommendations that can help you reach your specific financial goals.
To discuss your investments and potential investment opportunities, talk to one of RaeLipskie’s trusted advisors. To get started, contact us today!