6 Strategies to Boost Your Portfolio Investments

by Startacus Admin

Giving your portfolio investments a quality boost is by no means a simple task, but there are a number of tips that can guide you every step of the way. These tips will help you to formulate strategies that work in line with your investments, to bring about the desired results. 

Your strategy has to be adapted to suit your long-term goals and plans. The purpose of your investment is to accumulate wealth. Understand that investments require you to be patient and maximum yields are accrued over time. Having this at the back of your mind will give you an edge in your investments. See below, six strategies that will help to boost your portfolio investments. 

1. Identify your objectives 

If you’re going to succeed in investments, you need to have a clear picture of  your objectives and what you aim to achieve; otherwise, you would be without direction. You need to know why you are investing before you begin. Safety, Income and Capital growth are some objectives for investing. You can only pursue the right strategy when you have carefully outlined your objective.

Clear goals will help you to know whether or not you are making progress and will ensure that you are not swayed with any distractions that may arise. This will aid stability and show you your progress over time. 

2. Have a Definite Structure 

To boost your portfolio, it is necessary to have an existing structure. You need to know exactly what percentage of your portfolio goes into stocks, bonds, shares or whatever financial assets you have in mind. Regardless of what structure your portfolio takes, you should know that balance is key. It may take a while to get it right, but once you do, you’re good to go.

Over time, your portfolio may lose its structure because of a number of factors such as market conditions, upcoming expenditure and financial changes. It is vital to always rebalance your portfolio to the original structure. This could be done over a period of time – say yearly or every six months. It should be worthy of note that your structure is what you revert to after reviewing your portfolio. This is why it is important to have one. 

3. Minimize Costs 

You can easily get carried away with your expenses when investing. This is not a good strategy if you want to boost your portfolio. When looking for investment opportunities, find ways to reduce the costs that you accrue. Reducing your expenditure, even with the least amount,  could end up saving you a lot of money over a long period of time. Expenses include fees paid in brokerage, mutual funds or sales load.  

A good strategy with which you can reduce brokerage fees is by finding a broker who uses a ‘no’ or ‘low annual fee’ policy, reducing the costs of transaction. Another way to lower your expenses is for you not to overpay for any asset. A low price doesn’t exactly translate into a bad investment so make enough research about the details of the company you want to buy from before paying a fair price for assets or stocks.

4. Diversify: Spread your risks  

Like the saying goes, “don’t put all your eggs in one basket”. This is especially true in the financial markets. It is very important when it comes to the stock market, to diversify. Let your assets spread across several classes and where possible subclasses within the classes. Make sure your assets are not only spread across subclasses as this will defeat the aim of diversifying. 

Spreading your money across different investment strategies does more than just strengthening the individual assets. It could also be very useful in minimizing your risks. Because your portfolio is not concentrated in only one asset class, if something unforeseen happens, the impact can only be felt by that segment of your portfolio and not the whole portfolio. 

5. Make the most of tax-efficient investments 

Taxes can greatly affect whatever earnings you get from your investments, limiting your portfolio. Since taxes cannot be avoided, you should find a way to minimize these taxes. One good way of doing this is to venture into a tax-sheltered plan like the Roth IRA or 401(k). The tax benefits from these plans are profitable although you have to abide by certain rules that govern the plans. You should know that both plans come with different benefits so if you are planning to go for either, choose the one that suits your goals. 

Take care to make sure that using these plans should not be because of the sole aim of saving on tax. Some plans can outperform the tax-saving plans and you not investing in such may be more ineffective than the tax-saving plans. 

6. Study the markets and know when to act 

This is perhaps the most important tip to help you boost your portfolio. The market is ever-changing and you can only make the most of it if you apply yourself to knowledge. You can only learn how to invest in stocks by constantly studying the markets. It will help you know the best time to act and how to prepare for the unforeseeable future. Continuous learning will keep you informed and help you know when to perform certain actions in the market. 

Studying the markets will allow you to make the most of it and prepare for the worst when things don’t seem to go according to plan. Books, articles, studying experts and successful investors are some ways through which you can keep learning and studying the markets.

Conclusion 

Do not be carried away by how simple it seems to build yourself a quality investment portfolio. It takes a lot of effort and determination for that boost to happen. Don’t be afraid to ask for help, you may consult professionals if you need any. Nevertheless, these strategies are sufficient to point you in the right direction for success. 

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Published on: 16th May 2020