Posted on | May 25, 2012 | Comments Off on 5 Investment Strategies For Beginners
An investment strategy can be defined as a stratagem or approach that will help an investor select an investment opportunity (read stock) that has a good return on investment, or one that has proven to be a good investment opportunity. While most of the investment strategies for beginners will focus on tried and tested methods that have worked for others, by the end of the day, it always boils down to what the beginner investor can be able to work with to diversify their investment portfolio.
It is therefore correct to say that the many different investment strategies would cater to different investment needs. Some of the most notable investment strategies for beginners include:-
Define your Short term and long term Investment Goals
You cannot just wake up one day and decide that you want to start and grow an investment portfolio. You will need to sit down and do a critical investment goal analysis. This will help you determine the most ideal investment vehicle to board before you get started. With clearly defined short-term and long-term investment goals, you can then proceed to the next critical step and strategy for a beginner investor.
Choose an Investment Vehicle
Again, this is where you will need to sit down, armed with a list of your investment goals, and find an investment vehicle that will help you meet both your short-term and long-term investment goals. The best way to go about this point is to first decide on the type of investment that you want to do. You can decide to open a brokerage account, stocks and bonds, a college savings fund, 401Ks plans, IRAs, all these are investment vehicles that can help you achieve your investment goals. It is advisable that you only invest in something that you clearly know and understand. Thanks to the internet, you can be able to research and get useful information on a particular investment vehicle before you commit yourself.
Create your investment budget
Just like when doing your basic shopping at home, the only way you can get the most out of your investment is to create and set a budget for investment. How much money are you willing to invest in the stock market? This can help you determine the amount of money that you can afford to lose should the investment vehicle you choose fail you, as it sometimes will. Remember that an investment of any form is a risky venture, so you need to take your time to determine the amount of money that you can afford to lose without throwing you off balance.
Open a Separate Investment Account
After you have everything set and ready, it is time to open a separate investment account so as to keep good track of your investment portfolio. Besides, some investment vehicles, such as a 401K plan, or an IRA plan, is mandatory to have an account. Opening such an account is often a simple process that involves providing your personal information, signing an application form and transferring your allotted budget.
Learn about Investments
In order to diversity your investment portfolio and become a force to reckon with, you will need to take your time to learn as much information as you possibly can in regards to investments, especially on the investment vehicle that you have chosen.
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