Investing Tips and Tricks
Invest For Success
When you think about investing the first image that might spring to mind is some wealthy Wall Street character – all suited and booted. But don’t let that put you off considering a professional investment for yourself. There is no reason to be intimidated; investment can be an excellent financial move – whether you choose to do it full time or as a side hustle. As Benjamin Franklin said, an investment in knowledge pays the best interest; so long as you have the right skills and attitude, you can make a career in investment work for you.
Ask yourself this…
Before you make the leap, it’s a good idea to ask yourself a few questions, which might show whether or not you are temperamentally suited to investing. Firstly, what are you like at taking and managing risk? Secondly, are you able to control your emotions? And thirdly, do you have decent quantitative skills? That last question doesn’t mean you have to be a math genius, but you do need to have solid analytical abilities. Make sure don’t underestimate your own abilities here – a recent study by HSBC found that women tend to lack confidence although they have the same investment knowledge as men. Speaking of which…..
Women make better investors
Yup – it’s true. Men may like to crow about their successes from the rooftops, but the data show that, on average, women are better than men at investing. Numerous studies have illustrated this; for example, the Financial Times found that hedge funds run by women generated returns twice as high as their male counterparts in 2017. There are various reasons that might contribute to the female outperformance: women tend to trade less (thus paying less away in commission), diversify more (cutting risk) and brag less (‘nuff said).
Investing in stocks & bonds
No matter which asset class you choose to focus on first, there is no escaping the need for hard work and plenty of time spent on research. Ultimately, creating a balanced portfolio with investments across various asset classes will likely make the most sense. The diversification spreads your bets widely – thus lowering risk.
Within stocks, you can focus on ‘value’ stocks (cheaper, but typically slower growing), ‘growth’ stocks (faster growing, but pricier) or ‘high yielding’ stocks (often pretty dull on the growth front, but offering an attractive dividend yield. Fixed assets like government or corporate bonds are less volatile and typically offer a more solid, if less exciting, return.
Don’t overlook commodities
Commodities tend to be cyclical so timing is key – but they can offer amazing opportunities. Investing in precious metals can act like a hedge as they are tangible and keep their intrinsic value. It’s wise to make sure you know where to buy silver or gold, for instance, as holding those precious metals could help protect your portfolio when deflation is eating into the value of prices elsewhere.
Who wouldn’t want to be able to make money from the comfort of their own home – or indeed – while on vacation? Intellectually stimulating, flexible and endlessly varied, investing as a career can offer so many benefits it’s well worth considering so long as you have the right skill set.
