Is there such a thing as the optimal investment strategy? Investors have a ‘common dilemma,’ according to an analyst.
SELECTING THE RIGHT INVESTMENT STRATEGY AS A BEGINNER INVESTOR is critical to building and maintaining a healthy portfolio, but what does it entail in this era of global economic change?
Beginner investors are increasingly likely to dive headfirst into a strategy without thoroughly evaluating if it is a good fit for their circumstances and expectations in the current economic climate. Some beginner skiers spend their first day on the slopes cautiously learning the basics, then plough through on the second day believing they’ve learned everything they need to become professional skiers, only to wipe out on a small jump, according to David Kimberely, a financial analyst at Freetrade. “Learning about this occurrence reminded me of some criticism from a reader on one of our investment guides,” he replied when asked if there is an optimal investment plan.
“One reader expressed dissatisfaction with the lack of explicit directions, expressed in percentage figures, on how much to invest each month.
“This wasn’t an outrageous request, but it does highlight a typical issue that investors encounter.
“They frequently want to ‘figure it all out’ and come up with a one-size-fits-all solution that would tell them things like what to buy and how much of their cash to invest.”
“Like the skier who thinks he has it all figured out, thinking you can come up with a solution that will work in perpetuity leaves you more vulnerable than you realize,” he continued. And it will almost certainly mean that your portfolio will be heavily affected in the event of a crisis.”
Mr. Kimberly said that an investing strategy should be as individual as one’s financial needs and decisions, while also considering the local market and economy.
While there isn’t a one-size-fits-all solution, Mr Kimberley did provide some of his own recommendations and considerations that any new investor should keep in mind.
It’s crucial to remember, especially for new investors, that techniques and investment concepts that were once considered solid may no longer be viable, he said.
Due to changes in central bank policy following the 2008 financial crisis, what were once considered guaranteed return strategies, such as having a “bonds and stocks” split, are now completely ineffectual, according to the analyst.
“You have a broad.” Brinkwire Summary News