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Gabby Bows

Gabby Bows

Living Savvy

Things You Need to Know Before You Go Ahead and Invest

If you want to make an investment then you will know what a huge decision this can be. The main issue is that if  you aren’t careful with your money then you could end up losing everything, but with that being said, if you are too careful and if you don’t invest at all then you may never be able to take that next step in your life. If you want to get some top tips that will help you to make the investment you need then you can find out whatever you need to know below.

 

Stocks

 

There is no general rule for investing in stocks, but the older you are, the more you should reduce your exposure to any stock investment. This is because you need to focus more on preserving your capital. If you want a good rule of thumb then take your age and minus it from 110. This will give you a percentage number. This is how much of your portfolio should be invested in stocks. Of course, if you are willing to take more risk then it is possible for you to adjust this, but at the end of the day, this will give you baseline number.

 

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Index Funds

When you have an index fund, this will give you the chance to invest in as many stocks as you want. You can do this by making a single investment. For example, one index fund can expose you to 500 stocks. Index funds remain to be a fantastic way for you to increase the diversity of your portfolio and they also give you the chance to reduce your overall risk as well. If you think about it, you have your money spread across hundreds of stocks instead of just a few of them and this can help you to make sure that any hardships you face are kept to a minimum.

Buying Stock

 

If you want to buy individual stocks then you should buy at least 10 wherever possible. You should do this across numerous industries as this will help you to make sure that your portfolio is incredibly diverse. This may not be practical however if you are starting out for the first time. If this is the case then focus on index funds. That being said, there are so many ways for you to lower the risk of your investment and when you do put the work in, you will soon see how easy it is for the whole thing to come together without compromising your finances.

https://www.pexels.com/photo/cash-coins-money-pattern-259165/

 

Track Everything

If you are not tracking your investment then this is a major mistake. After all, when you track your investment this will make it much easier for you to know when it is going down and it also gives you the chance to establish a clear exit strategy as well. Platforms such as CMC Markets are great for this. If you are not careful here then this can cause you major issues, so it is important to know that you have to be aware of how your investment is doing at all times.

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