Smarter ways to start investing your money
Now that the recession has passed and the economy is starting to recover, it poses a great opportunity for many investors to start building their portfolio back up. If you were smart enough to invest in precious metals and you diversified your portfolio you won't be struggling nearly as much as many others. However anyone looking for smart investments needs to follow these investment tips:
1. Precious Metals - investing in gold and other precious metals is one of the smartest investments you can make. Precious metals are the same as having insurance, they are there to protect you from losing everything. Precious metals like gold are used to secure the dollar or whatever currency you are dealing with. This means gold is good in any country and you will be just fine. Gold literally holds its weight and it needs to be part of your investment portfolio.
2. Mutual Funds - a wonderful way to diversify your portfolio is through the use of mutual funds. These investments allow you to invest in larger companies and smaller ones alike. It doesn't have the same risk as investing directly in the stock alone since you are in an account with others. Mutual funds are the preferred way to invest by a number of individuals because it isn't as risky. It is also a great way to build up a solid retirement without a lot of work.
3. Bonds - for a low risk investment that also helps you to build up a strong portfolio, consider bond investing. Bonds are able to help you invest money into larger companies and you are guaranteed a return along with interest. Government bonds often have the largest payouts and they are backed by the U.S. Treasury so this does help to reduce a lot of the apprehension you may have about bond investing. If you are choosing to invest in distressed debt bonds, be careful of the companies you work with. Choose investments you know will be able to bounce back from their recent financial mishaps.
4. Real estate - investing in real estate is a great way to add to your portfolio and it's also a great way to make a large chunk of change. Real estate investing needs to be carefully thought out as you don't want to invest in a number of properties that aren't going to move anywhere. Make sure you are able to invest in properties that will increase in value and will not leave you in a difficult financial position.
5. Start-ups - to really watch your investments grow consider investing some of your money into start-ups and other businesses. Offering some of the financial backing for a company that has a great product and a great opportunity to grow will help you to build your investments. New businesses do tend to be pretty risky so you have to be careful and make sure you are choosing the investments wisely.
6. 401(k) and IRA - if your employer is offering one, you need to invest. They are planning to match your contributions to a certain percentage. Why not let them give you some extra money instead of throwing it away? You need to start a retirement plan with your employer and hopefully you are able to get a Roth IRA or Roth 401(k) plan so you won't end up paying a huge percentage of the earnings to taxes when you do retire. You can increase your contributions to the retirement account and literally watch the money grow. Keep in contact with the manager of your account so you know what it is doing and where you can make investment changes to see it grow faster.