Investing In Stocks: The Importance of Diversifying Your Portfolio

Over the long-term, US stocks have consistently earned more compared to investment grade bonds. In the same time frame, one hundred dollars in the stock market can return an annual average of ten percent, while bonds can earn around five percent. While the market is constantly fluctuating so you can’t expect this type of increase consistently, historically, stocks do tend to offer more growth potential in the long-term. Because of this, many people who want to diversify their portfolios and save for retirement are turning to ETFs, stocks, and stock mutual funds.

A Dip in the Market

People tend to avoid investing in the market because the volatility can be very stressful. But, in reality, it’s more important to pay attention to how the market behaves over a long period of time as opposed to stressing out over a daily or weekly point drop. This is exactly why we recommend holding onto your stocks for the long-term. Even though there are dips in the market from time to time, by far, stocks offer the most growth potential, just as long as you don’t act hastily and sell as soon as you see a slight drop in value.

The Right Mindset

Keeping your cool when you’re dealing with the stock market is essential. You should look at it this way: unless you sell off your investments, the losses are only on paper. Should you feel tempted to sell your investments as soon as they drop in value, keep in mind that you’re investing for your retirement or another period that’s far down the line. Selling only means you’re locking in your losses. Instead, riding out the market can be a much wiser choice. Additionally, if you regularly save every month and continue to invest when the market is down, you’ll be adding to your savings when there’s a dip in the market. Once the market has finally recovered, you’ll be in a much better position for growth.

Diversify

Remember, you don’t have to invest all of your hard-earned cash in stocks. In fact, many people are now diversifying their portfolios by also investing in oil. The right mix of investments will ultimately be based on your current financial situation, personal goals, retirement plans, and your tolerance for risk. Keep in mind, if you have plenty of time to save for the future, then you also have a higher level of capacity for risk because you will have more time to recover from any type of short-term loss.

The Best Tips for Smart Investing

Investing can involve a firm commitment to making your money work, doing your research, and making smart decisions based on your findings. Below you’ll find some helpful general investment tips that you can follow whether you invest in stocks, oil, or cryptocurrency.

Don’t Expect to Get Rich Overnight

While the main goal of investing is to build your wealth, it’s not just about seeking the highest return possible. Before you take the plunge, you should consider your investment goals and objectives in order to make realistic and informed investment decisions that will help you achieve your goals.

Have a Plan

Create a plan on your own or with the help of a financial planner. This can help to eliminate the urge to sell or buy investments without careful planning and decision-making. Keep a list of your goals and schedule days of the month to review these goals to ensure you remain on track. Having a plan in place will help you when there’s a dip in the market and it can also help you look at your investment plan more objectively.

When you’re developing a plan, include the following:

  •    Know your plans for diversification
  •    What are your goals
  •    What is your time frame?
  •    What types of investments fit your goals?
  •    What are the risks of each investment option?

What to Do Before You Invest

Before you even consider investing, do your homework. This will help you feel more comfortable with your investment options and choices.

Considering this is your hard-earned money, only work with people you trust. This means, if you’re considering hiring a financial advisor or portfolio manager, only choose people with a solid reputation. If possible, get a reference from a family member or friend.

Stay Smart

Learn about common scams and always remain alert. Basically, if something sounds too good to be true, it probably is. Be on the lookout for red flags and guarantees that you’ll make a determined amount of money in a specific amount of time.

Avoid Looking into Past Performances

Never choose an investment based on past performance. While past performance is definitely an achievement, it in no way indicates what you can expect in the future in terms of returns.

Save Up for Your Investments

Avoid borrowing money to invest. Since there’s no surefire way to ensure you’ll make money, the last thing you want is to lose on your investment and end up owing a lender. Instead, put money aside every payday and use your own money to invest. This will take a lot of pressure out of the mix. It will also make it slightly less stressful should you run into a dip in the market.

 

Is Investing in Oil Worth the Risk: Exploring this Volatile Market

The recent performance of stock prices is a major reason why you should think about investing in oil. Starting at the beginning of 2018, the prices have been soaring and have almost doubled from just two years ago.

However, the oil market can be somewhat volatile. Fortunately, there are ways you can invest in oil that will allow for plenty of growth down the line, even if there’s a dip in the market.

So, what do you need to do to get started?

Do Your Research Before Purchasing Stocks

Your first step is doing a little research to determine if the oil and energy field is the right fit for you. You can get reports to learn more about the kind of profit this type of investment generates, in addition to how much debt they’re carrying. If you’ve decided to take the plunge and purchase stocks, consider investing in one of these well-known major oil companies.

 Investing In Oil Commodities

Buying oil futures is considered a very risky way to invest in oil since the market can be very volatile. It can also involve coughing up a lot of capital. Essentially, if you’re not willing to do the research or you’re not emotionally and financially prepared to take a loss at some point, you may need to search for a different way to diversify your portfolio. However, if you’re ready and willing to take the chance on this type of volatile market, it can pay off big in the end. As an example, if you decide to buy into oil commodities and the price rises before the end of the contract, then the oil futures can end up being a very lucrative investment. However, at the same time, it can also be very risky.

People who have experience investing in oil, such as fuel oil suppliers, usually know the cost of oil and how it fluctuates throughout the year and the right time to invest. But for the average investor, the lack of knowledge and investing experience in this particular field can result in disaster, without first doing a little research or employing the services of an experienced financial advisor who’s familiar with oil futures.

ETFs

Those with basic knowledge of the oil industry should look into oil ETF holdings in order to determine if this type of investment is the right option. Keep in mind that ETFs can vary widely. Instead of oil and energy company stocks, some will invest in oil futures. This basically means that they view the oil prices and oil market differently.

A Lucrative Investment

If you’ve decided that investing in oil is a solid option and the perfect way to diversify your portfolio, then now is the time to jump on this opportunity. While volatile at times, investing in oil is a more stable market compared to other popular investment options such as cryptocurrency. In the end, with a little knowledge and advice from an experienced financial advisor, the returns can be enough to allow you to finally retire in style.