Best Tips To Protect Your Investments

CompareHero.my Team

CompareHero.my Team

Last updated 17 February, 2022

Investing is a scary, risky process. It would be a nightmare to watch your hard-earned money go to waste by losing it all. However, not all hope is lost. You just have to know how to protect your investment portfolio so that you minimize your losses. Read on to find out how to ensure your investments are secured and safe:

Try to diversify 

It’s extremely important to try diversifying your investment portfolio. When you diversify by having a combination of various assets such as bonds, shares, and commodities, you will be protected during times when the market dips. 

Aside from that, you can consider the asset classes where your portfolio contains a mixture of small to large companies spread across multiple industries and sectors. Furthermore, rather than focusing only on local stocks, you can consider investing in international stocks as well such as the U.S because when your investment portfolio is spread across the globe, you would not be affected so much when there are economic downfalls in certain regions.

Invest on a regular basis 

Another way to protect your investment portfolio would be to keep making regular investments. Though it’s normal for most people to check for investment opportunities instead of diving straight into purchasing stocks, let’s be real - you won’t know when would be the right time to make the purchase. So once you start to automate your investment process regularly, then you will avoid any errors while thinking about whether to invest or not.

When you make regular investments, you are essentially saving yourself from potential failed investments. Besides, when you’re purchasing the stocks, you are essentially buying more when the market price is low.

Save more than you spend 

You know what they say - don’t spend until you have saved up a certain amount. After you’ve successfully paid off your debts, you should consider those as your savings instead. Therefore, you’ll learn how to maintain a small budget throughout your lifestyle. 

If you’re one of those who loves to watch your investment grow over time with interest, then all the more reasons why you should consider your investments as savings rather than spending it all on your expenses or leisure.

Keep cash on hand 

When it comes to short-term money, you shouldn’t rely 100% on stocks. Imagine if you needed to pay your bills but the market has dipped?  You might not have a sufficient amount of cash to pay for those expenses then.

Hence, you should make sure that the money you need for the upcoming months isn’t coming directly from your investment portfolio. The reason is you wouldn’t be taking too much of a risk with those funds. The money used for your investment portfolio should be for long-term purposes where you don’t need them short-term.

In a nutshell, regardless of the size of your investment portfolio, it is important to ensure you take the right steps to protect both your investments and yourself. 

The CompareHero.my team is comprised of many talented individuals, sharing their knowledge, experiences and research to help others make better financial decisions.