The past few years have been turbulent, to say the least. Between the global pandemic and widespread economic instability, many people are struggling to know how to plan their financial futures. This is especially true when it comes to investing. Whether you are investing for short-term gains or aiming to build your savings for retirement, it can be difficult to know how best to use your available funds. So, in today’s post, we are going to offer 5 tips for investing your money in 2022!
1. Invest In Yourself
Global markets are becoming increasingly unpredictable and perhaps even unstable. As a result, you could be headed for disaster if you throw all of your eggs in one investment portfolio basket. Alternatively, you can invest in personal endeavors that could pay dividends (literally or figuratively) over the long term. For example, you might invest in a course to learn a second language or even improve your long-range shooting with the experts at Outdoor Solutions.
2. Don’t Go All In On Crypto
Cryptocurrency has been the number one talking point of many investors these days. Though some people have made a fortune by investing early, late-comers are paying the price of investing in an unregulated and erratic new fad. Unlike strong, established currencies like the U.S. dollar, cryptocurrencies like Bitcoin can lose half their value overnight or see record gains in the same time period. In short, if you want to reduce risk in your investments, make sure that no more than 10% of your portfolio is dedicated to crypto.
3. Focus On Dividend-Paying Funds
As previously mentioned, nobody really knows where the economy is headed over the next few years. Between rising living costs, a seemingly never-ending pandemic, and supply chain issues across the board, the economy appears to be ready for another bear market. So, rather than trying to put more money in growth stocks, focus your attention on funds that pay regular dividends. This way, even if the value of the fund drops, you know that you can get your money back over time.
4. Return To Traditional Savings Accounts
Interest rates are going up, which means that debt will become more costly and savings accounts will become more lucrative in the near future. Over the past decade, low interest rates have kept most serious investors away from savings accounts; they simply could not compete with the high ROI of the broader stock market. However, that trend will likely reverse in the very near future. Stocks are wavering while savings accounts are offering higher returns (with much less risk).
5. Play the Long Game
Many investors love to tinker with their portfolios regularly or even day-trade, but this simply is not the best way to get high returns. Sure, the economy is shaky now, but historically, the stock market and other economic indicators (like real estate) always trend upwards. This means that you should not overreact to turbulent times. Instead, shift your assets to a more risk-averse strategy and wait for the next bull market!
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