Investments

Increase Wealth Through an Investment Portfolio

Your financial future can be as secure as you want it to be if you are willing to start saving today. You can use the stock market to compound your gains by as much as 10 percent or more per year on average. While you may need to take risks in the short-term to see such rewards, there are safe investments that will allow you to grow your money as well.

What Is Your Risk Preference?
If you don’t want to risk the loss of your capital, you may want to put your money into government bonds or index funds that are passively managed. The United States government has never failed to pay its debts and index funds aim to track the growth of the market. Even during times of recession, the S$P 500 has the potential to grow about 7 to 11 percent annually. For those who like to take risks, you can put your money in a growth fund that offers higher returns along with higher volatility.

Which Companies Are Worth Investing In?
There are many companies that you should consider investing in if you want long-term growth and the possibility of a dividend. You should look for businesses that are stalwarts in their industry like Microsoft or Coca-Cola or are diversified enough to handle market downturns without losing market share such as Google. If you are going for growth, you should look for any business that is about to introduce a new product or revolutionary service.

Don’t Let Emotion Get In Your Way
Emotions can make it difficult to make money because you will take money out too soon or not put money in when you have an opportunity to compound your growth. These days, you can use software that will put money in and take it out based on a system that you create. Once you have the variables inputted into the program, you can allow to run itself until you are ready to make adjustments to your long-term investing strategy.

Your long-term financial future depends on your willingness to put your money in the market and keep it there for years to come. The good news is that your investment returns are taxed at a lower rate, which means that you are rewarded twice for your patience and can reap the rewards that you sow.