5 Smart Investing Strategies
Don’t Time the Market Market timing is one of the most recognized catalysts in investing: “buy low and sell high.” However, it is difficult to know when the markets are going to change. Investors who attempt this strategy can have success over short term; however, over the long term it is a difficult strategy to follow. Missing some of the best trading days can be detrimental to long term returns.
Asset Allocation Asset allocation is an approach to manage investment risk by diversifying a portfolio among major asset classes such as stocks, bonds and cash accounts. Each asset class offers different levels of risk and potential return. Not all asset classes will do great at the same time and not all asset classes will perform poorly at the same time.
Investment Selection Diversify assets among the major asset classes. Best practice is to consider your investment goals, risk tolerance and time horizon. With a good understanding of these criteria, it is feasible for your financial advisor to make a proper recommendation. Long term investors may be a more likely fit for stock market or annuity investments. While the short term/risk adverse investor will be better suited for a more liquid, less volatile portfolio.
Dollar Cost Averaging (DCA) Dollar Cost Averaging involves systematically investing on regular intervals rather than trying to time the market. The strategy helps investors stay disciplined in their investment approach despite swings in the financial markets. DCA allows you to take advantage of averaging your investment cost among highs and lows without emotion and timing the market.
Rebalance Portfolio Rebalancing your portfolio on a regular basis is important to ensure your investment risk is adequate given your tolerance. If overlooked for a period of time, a portfolio may take on a completely different degree of risk based on performance of different asset classes within your portfolio.
Securities offered through Securities America, Inc., member FINRA/SIPC. Eric Hunsicker, Registered Representative Advisory services offered through Securities America Advisors, Inc. Kansas Financial Resources, Inc., and Securities America are separate companies.