The New Year has just started, now is a good time to have a deep reflection on what your financial goals for this year are.
Just like the previous years, 2020 opens up good opportunities for young professionals to invest and to put money to work for their financial freedom. If you want to start your investment journey in 2020, here are some guiding tips for you:
Diversify
Just like the saying “don’t out your eggs in one basket”, it’s important for new investors to avoid putting all their money in one financial product.
Investments can be volatile, especially those with high profitability like stocks and bonds. They can be profitable one moment, and completely bad the next.
Putting your money in different investments can help you avoid losing all your money in a single day. Having a savings account with a decent interest rate is also a good place to park your money in case the investment market isn’t looking good.
Handle your emotions
Investments can be a rollercoaster ride. The financial markets can swing up and down in a single day without warning. If you’re highly emotional, you might end up crying yourself to sleep when looking at your investments go down.
But this is a trap for new investors. Veteran investors know that when emotions get in the way, they lose out on possible high-yield opportunities. So they always control their emotions and think reasonably. If you have a solid risk management strategy, it would be easy to control your emotions.
Pick a strategy that works
Many people have been investing for years. As far back as the 13th century, people have already been investing with banks and brokers.
With so much history behind investing, there’s bound to be one strategy that would fit your risk appetite and how much you want to profit. You just need to study and find that strategy.
Either time your entry or enter early
There are two ways to maximize your profit potential when you start to invest. While they both look similar, there’s a big difference in the risk you take.
When you time your entry in an investment product, you can get bigger and faster returns. But you also take on a lot of risk when the investment goes against your prediction and strategy.
But when you invest early and regularly, your investment can take a while to gain profit. But you’ll be safe from economic fluctuations because you’re looking at future gains rather than short-term ones.
Go long-term
Lastly, the best tip we can give new investors is to go long-term. Long-term investing can be discouraging and difficult for people who wants easy money. But it’s the safest way to ensure profitability in the future.
Of course, you can choose to do short-term investing like day-trading, but that’s a big risk for new investors and you could lose a lot of money if you’re just starting.
Final words
There’s nothing better than starting your new year with a clear goal in mind and a concrete plan of action. So start your investing journey in 2020 with these valuable tips.
