Whether you are a business or a private investor, there are a few solutions out there that can help make your investment work better for you. Read on to find out what they are and how you can get a better return.
Play the long game
Unless you are very lucky, you won’t make money in the short-term from your investments. With this in mind, you should never make panic buys, or, indeed, panic sales. You need to be aware of the bigger picture and play the long game because that is where the greatest rewards lie. There are many reasons why a stock value suddenly plummets. It could be due to seasonal trading or a reduction in the strength of a particular currency. You have no control over these issues, and making a sudden decision is more likely to damage your portfolio, rather than strengthen it.
Reduce your tax payments
Make sure you keep abreast of the government regulations about tax and investment, as you can save a lot of money each year. There’s an awesome guide over at Investopedia, but the basic principles are easy to follow. First of all, you need to address any investments that are tax-inefficient. These are things like junk bonds, straight preferred stocks, and convertible preferred shares. Next, you need to boost your tax-efficient investments, like you corporate bonds and real estate investment trusts. Tax can be a complicated beast to tame, so if you are struggling, hire an accountant who will be able to save you money.
While we are on the subject of getting help, it can be prudent to do so if you are struggling with your investments. You can look into using diversity fund management companies to spread your risk across different commodities and investment areas. For businesses, using analytical software can help you get real time information on your positions. Take a look at this portfolio management by Broadridge for a good example of what to expect. A financial advisor can also help you get to grips with things, especially if you are looking at diversifying your portfolio into property.
Keep Things Simple
It’s a well-known tip that spreading your investments across stocks, bonds and cash can strengthen your position. However, you don’t want to run the risk of spreading yourself too thin. Try and keep things simple. If you don’t, you run the danger of weakening your performance because your investments just won’t perform for you.
“Don’t get cocky, kid.”
If you get a big win on an outsider, it doesn’t mean you have suddenly turned into Warren Buffett. Most tip-offs prove to be false, so no matter how much success you have had, there is always the chance that things can turn sour. Again, this is where diversifying your holdings can help. Hedge your bet with the likes of McDonalds and Google, and use any surplus to bet against the market. It won’t always pay off, and when it doesn’t, at least it will be money you can afford to lose.
Got any more tips on how to make the most of your investments? Please feel free to share away in the comments section below.