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Tips to managing your investment portfolio
Managing an investment portfolio is a lot like managing a business. With a disciplined, patient, and proactive approach, you may preserve your wealth while attaining financial independence. Your investment strategies might differ, but you can bear in mind some principles that are consistent at its core, which not only match the markets but your individual characteristics as well.
It’s also important to remember that not all investments in a portfolio may generate returns. It’s a lot like a sports match – you win some and you lose some, but to win a game you’ll just have to win more points than you lose. Read on for some tips on investing and find out how you might be able to ace those points!
Invest only in assets you understand
In many cases, retail investors act out of the Fear Of Missing Out on a “sure-shot” investment opportunity. The key to avoid any impulsive decisions is to worry less about what you don’t know and instead, channel resources into being sure about what you do know. There are vast amounts of resources online to help you learn. For example, you can learn more about debt investments on a platform like Funding Societies where we strive to make the concept easy for you to understand and pick up.
Diversify
It is a prudent approach to create a basket of investments that provide broad exposure within asset classes. It spreads the risk and reward within your investment portfolio. When it comes to investing, the general sentiment is: The more diversified you are, the better.
We should also consider diversification within an asset class or sector. For example, if you invest in debt investments, you can distribute your investments across many SMEs and industries to prevent concentration risk.. There are also varying products in debt investing that caters to the different risk appetites of investors. An example would be the Guaranteed line of investment products which effectively guarantees returns to investors, making it a feasible choice for experienced investors to balance out their portfolio or for beginners to dabble in the art of investing.
Read Also: 7 types of alternative investments beyond the regular go-tos
Invest for the long term
We believe that a long-term horizon is a necessary ingredient for investment portfolio success. Investing is a marathon, not a sprint. Don’t get carried away with the ebb and flow of the market, and stay patiently invested. Also keep in mind that past performances are no guarantee of the future, and individual situations may vary. Lastly, though this may be rather unintuitive, do not be swayed by short-term volatility. Long-term investors stand to gain from periods of time lasting years or more.
Re-balance your portfolio regularly
Over time, your investments may fall out of sync with the original asset allocation. You may want to restructure or re-assess your portfolio allocation regularly. There is no guarantee that a poorly performing investment may hit a rebound, it may be wise to make calculated decisions and consider letting go of such investments from your portfolio to stem further losses. That being said, try not to tinker with your investment portfolio at short intervals of time – it is important to give time to investments and take into consideration its future outlook and potential.
What’s Next?
The art of investing and managing one’s portfolio may seem daunting, however, by constantly keeping in mind the few key principles necessary for success, you can possibly reach your investment goals and win the game.
More information on how to invest in Singapore |
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How to invest in Singapore
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Definitive guide on how to invest in Singapore |
9 Principles of Investing for Beginners
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Investing requires time, research, and maintenance. For beginners and those who want a quick refresh on the main principles of investing, here are 8 crucial tenets. |
7 Types of Alternative Investments
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Alternative investments beyond the regular stocks and shares can be a means to diversify your portfolio. |
Ultimate Guide: Investing During a Recession [2020]
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COVID-19 has brought global economic activities to a near standstill, As investors, we should stay apprised of global news and continuously review our investment. |
Disclaimer: This article is not meant to constitute/be construed as a form of recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decisions as may be appropriate. View full disclaimer notice here
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