9 Tips for Managing Investments

Wealth Management | 9/20/2022

Written By: Jenny Boudreau

Successful investing requires patience and discipline, but emotions can get in the way. To help you stay focused on your investment strategy, remember the following tips for managing your money.

#1: Markets can be turbulent.

It’s essential that you prepare for market declines. Despite the temptation to pull out of the market at each downturn, it may be worth considering a smaller adjustment to your investment approach. By remaining flexible, you may be able to take advantage of opportunities while managing risks.

#2 Don’t try to time the market.

When markets rally or pull back, it may be tempting to buy or sell. However, investors often guess wrong, potentially missing out on the best market plays. It may be better to make minor adjustments to help you stay the course.

#3 Create a portfolio that reflects your overall risk tolerance.

When building an investment portfolio, the objective is to take on the amount of risk that aligns with your goals and timelines. Ask yourself the following questions:

  • Am I too heavily invested in one asset?
  • Why do I own the investments I own?
  • Do I hold the same investments in different accounts?

#4 Too little risk may mean missing out.

Many factors can lead investors to low-risk investments, such as global uncertainties and fear about the economy. While minimal risk may seem like a safe move, you could miss out on opportunities. The following questions may help you determine whether you should consider taking on more risk:

  • Do I have enough growth-oriented investments in my portfolio?
  • Can I accept short-term losses for potential long-term gains?
  • Am I comfortable taking on more risk to pursue higher investment returns?

#5 Avoid emotional decision-making.

Before you start investing, think about your long-term goals and why you’re investing. Use this vision to find a balanced approach that includes planning ahead, resisting herd psychology, automating investments, and building a diversified portfolio (see #6).

#6 Diversify your investment portfolio.

Diversification is designed to help manage risk by identifying investments that may perform differently under various market conditions. To diversify your portfolio, choose a mix of investments across a variety of areas with various rates of return, and regularly rebalance your portfolio.

#7 Focus on your goals, time horizon, and risk tolerance.

Many investors make investment choices based on past performance. However, investments that outperformed last year may – or may not – perform the same this year. In other words, by the time you decide to invest, it may be past the opportune investment’s time.

#8 Consider the impact of taxes.

Consider the tax impact whenever you buy or sell an investment, develop a financial strategy, or determine your estate or philanthropic approaches. If your investment returns have different tax treatments, your financial position may change.

#9 Work with a financial professional.

Positioning your investment portfolio to reflect your goals, time horizon, and risk tolerance can be complex. Financial professionals take the time to understand your unique situation and work with you to help build a personalized strategy for your current and future needs.

The advisors at AssuredPartners Investment Advisors are ready to answer your questions, provide reassurance, and discuss investment opportunities.