In case you didn’t realise: we’re just T-minus 16 days until 2022! If you’re bracing yourself for the new year, you probably already want to plan your finances for the next twelve months. We recently wrote an article on how you can plan for your 2022 expenses:
In this piece, we’ll look at another hot finance topic: investments. Check out these simple tips you can follow to plan and get the most of your investments next year.
Look back at your investments in 2021
If you’ve already started investing this year, this one’s for you. Want to get the most out of your investments in 2022? One way to do that would be to reflect on your journey as an investor this year. After all, the saying ‘‘experience is the best teacher” exists for a reason.
Go through a list of what you invested in and think back on what worked for you and what didn’t. This way, you’ll know what you can do differently this year, and you can have better pointers on what to avoid.
Weeding out the things that you didn’t like also leaves you more room for trying out other types of investments. You’ll then get to reap the benefits of a more varied investment portfolio.
Know your risk appetite
All investments come with risk—some more than others. Generally, investments that bring in high returns also come with high risks. If you feel you’re not ready to take the plunge yet, feel free to play it safe. But if your goal is to bag bigger returns, it’s up to you to decide whether the risk is worth taking or not.
At the same time, it’s good to be flexible when it comes to dealing with investment risks. Be open to change and know that you won’t always get the same results for the same type of investment. Part of the investment journey is accepting that investments can be volatile, so be prepared to deal with some occasional lows.
But again, if you’re not ready to deal with huge risks just yet, stick with the safer investments. The beauty of investments is that there’s something for everyone, including those who want to stay low-key for a while.
Diversify your investments
Speaking of risks in investments, one way to lower it is through diversification. But what does that even mean?
In simple terms, you essentially distribute your risks by dabbling in various (diverse) investments. So instead of focusing on one investment that would be volatile/potentially high-risk, you have a portfolio of both low-risk and high-risk investments.
This is a smarter way to handle your investments, especially as the world recovers from an economic downturn from Covid-19. Investments will be all the more volatile when the economy isn’t great, so be more cautious of what you’re investing in during this period.
Get tips from the right sources
If you’re relatively new to the investing scene, you might be eager to get all the information you can. While that is great, be careful of where you source that information from. The harsh reality is that not everyone who proclaims to be a financial guru has as much knowledge as they claim to have.
Open social media, and you’ll see numerous ads by influencers recommending a certain investment app or account. While some of those may be genuine, there are others that do it just for likes and shares.
Before taking any advice, make sure that the person is well-experienced in the field and is giving you unbiased and true information. If they recommend any products, check the reviews before committing to anything.
For starters, you can check out these verified financial experts on YouTube by clicking on the button below:
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