Investing is imperative to building wealth and 2020 is the year of opportunities. With a global pandemic form new value, now is a better time than ever to invest in top quality investments. These are my Top 10 Investment tips for 2020.
- Make an informed decision
It sounds simple; however, I have seen many people becoming “Day traders” over night! Success in investing is understanding what you are investing in and how you are investing in it. I personally have little to no knowledge on in-depth computer software, so I cannot judge a Software company on its new software due to my lack of expertise. I would need to look and invest in something I know and understand in order to succeed.
- Take into account Risk!
Risk is a very controversial topic with many opinions on whether to use it or avoid it. My theory is one needs to use risk wisely in order to grow. Risky investments such as an IPO (Initial Public Offering) should not make up your entire portfolio. That said however, it would make a valuable part of a well-rounded portfolio and should not be ignored.
- Don’t Ignore Crypto
I will be honest….I was a sceptic at first. Crypto currency is here to stay and will continue to offer great returns! As per my last point, it is a risky investment, but it can be very lucrative. Just ensure you comply with local tax laws, as some countries have very strict laws that can catch one out.
- Don’t go Crypto Made!
This does sound contradictory. But one cannot go crypto mad and build up a large illiquid crypto portfolio made up of many obscure and unheard-of crypto currencies. Crypto is here to stay, but it is not the only way to invest. Please keep that in mind.
- Avoid Mutual Funds
I’m not sure how these funds are still around looking at the bashing they get from advisors worldwide! Mutual funds do offer good returns but often charge astronomical fees! These fees are levied on performance and maintenance of the fund and can cost your dearly. Trust me, there are better investments out there!
- Consider alternative investments
With the internet and ease of money flow, new methods and investment types are popping up. These new investments are great opportunities for growth and offer some lucrative returns! However, ensure they are a register financial provider with the relevant government and intermediary services in order to avoid scams.
- Learn to love Bonds!
Bonds can offer attractive yields and are often more predictable and safer than other types of investments. The key with bonds is looking abroad and doing your research. Another type of bond investing is peer-to-peer lending! This is when investors loan money through an intermediary to a person who pays an agreed upon interest rate. Often these are riskier but offer high yields.
- Consider Private Equity
Private equity is investing directly in companies not listed on the stock exchange. These investments are often risky with low liquidity but offer great long-term returns. These types of investments in the past were unattainable by most and only accessible by the super-rich. However, with the rise of Angel investing and the internet is available to most at affordable prices.
- Know your exit
Liquidity is often an issue when investing. And thus, knowing when you will need the money is important. It is also important to keep cash or liquid investments/ savings for emergencies to avoid digging into your hard working invested capital.
- Think long term
As Warren Buffet as been quote saying many times, Long term investments always win! Looking for Value investments and investing for their growth overtime can often result in better overall results. It is less exciting but more efficient and effective in your wealth building journey.
Investing decisions are hard with so many options out there. But by using these 10 tips you can avoid missing out or making the wrong decision. The most important thing is to take your time. There is no need to rush things! Take you time and make an informed decision!
Author: Brad Taylor – Once A Week Blog