How to Keep a Healthy Portfolio

Jorge A. BetancourtUncategorized

With social security shrinking, our money will no longer be able to guarantee us comfortable lives as we advance towards our years of retirement. Instead of relying on cushy payments from our governments, we now need to step up our own efforts and guarantee that we can take care of ourselves once we are no longer in the workforce.

This may sound a little frightening, but as long as we are managing our savings correctly, this shouldn’t be the reason for too much concern. Of course, you shouldn’t play with your entire portfolio – whether you are buying bonds or trading currencies.

We have put together a list of recommendations that will help you make the smart choices about your money’s and your own future.

Invest in Assets You Understand

No truer advice has been given. Hemingway once said – only write about the things you know well and it will be beautiful.

The same advice can be extracted for your portfolio. Your investment should stem from familiarity. Some people may be very good at predicting Forex and deciding which way the next currency fluctuation will go, but this doesn’t mean that this is necessarily what is best for you.

Buying Treasuries offers little return, but the fact is that these assets are probably the best way to actually guarantee yourself a steady profit, even though it will be incremental. The more funds you amass, the better your investment opportunities will become.

Acquire the Necessary Mindset to Operate a Portfolio

It is very simple to understand, really. Many people dive into an investment with the idea that they will quickly turn their money into a solid capital. When they lose, they panic. Here are a handful of tips that will help you develop the mindset necessary to master your investment:

  • Remember that your investment should be expendable

  • Don’t chase your losses and don’t follow “fevers”

  • Your returns will be long-term rather than short-term

These three principles of successful investors are very easy to understand. You can be 30, 40 or even 50. As long as you keep with trends and do your daily dose of reading, the next 10 or 20 years will see your total net savings increase by at least 10%.

Some among you will be better and they will quickly push up their overall wealth to achieve the results they want.

Invest in Smart Businesses

There are companies that will simply not go out of business. Locksmith is a great example of that. Not everyone can change their door locks, and there is a constant demand for this. Regions, where no such services operate, can quickly set up a shop and try.

If you are smart enough, you will be the one to invest in your nearest locksmith business and help them expand and grow. Once again, your returns will be nominal at first, but they will be growing incrementally as you continue to scout new business opportunities.

The key to being a successful investor is to be able to get ahead of events and make the correct investments at the right time.

This means keeping your eyes open for new opportunities. If you are interested in funding new businesses, you can do research for the company that you plan investing in, its niche and competitors.

Simple due diligence would allow you to see what the prospects of the company are. You should put emphasis on scouting opportunities and business growth rather than asking questions similar to “Will I turn a profit if I invest in…”.

A smart investor will always know to stay ahead of events and therefore reap solid returns. It’s important not to jump on every craze, though, as this could cost you money. Listen to Warren Buffet and don’t fall for cryptocurrencies.

Final Thoughts

The world of investment is one of opportunities. To get yourself started, you will most likely have to put a significant effort into scouting out the right opportunities and acquiring an initial capital.

You needn’t hurry. Start small and calculate your winnings in percentages. Even if you only had $500 to invest you can still collect valuable information about how an investment works. Your returns can be scaled – what you should focus on is getting the right formula down to a T.

As soon as you have developed the right mindset to be a successful investor, you will be able to take on bigger risks. Remember – your investments shouldn’t determine your entire future. A diverse portfolio is something you should always strive towards.