Investment involves using money, assets or other mediums of exchange to increase an asset’s value over time in order to generate income and/or gain appreciation. People invest in a variety of vehicles, including stocks, bonds, real estate, and mutual funds. Some investors manage their investments themselves, while others enlist the services of a financial professional. Technology has also made it easier for people to access automated investment solutions by way of robo-advisors. Whatever the strategy, it’s always a good idea to check in on investments regularly to ensure they remain aligned with financial goals.
A well-diversified portfolio is a key to investing success. Investors should aim to keep their exposure to each asset class within a target range and review the performance of individual investments periodically. If an asset class allocation drifts too far from a goal, investors should take steps to rebalance.
Investing may feel intimidating or complicated, but it is a smart way to give your money a chance to work harder for you than it would just sitting in a savings account. There are a variety of ways to start investing, from establishing a long-term retirement plan to setting up a recurring investment plan like dollar cost averaging.
The 21st century has ushered in a new era of investment, bringing discount online brokerage firms and free trading apps to the masses. However, it’s still important to focus on proven strategies and avoid trying to time the market or chase the latest hot trend.