Like the millions of American farmers over the decades of poultry farming, serious investors should be constantly implementing innovative strategies to make their eggs grow over time. But, in the case of investing, these aren’t chicken eggs—they’re your nest eggs.
To take full advantage of the potential gold mine that is the investment arena, you can’t just stare at your portfolio, twiddling your thumbs as you anxiously watch your stock performance.
You have to actively work to grow your portfolio if you want to have success as an investor.
But how do you grow your portfolio safely and strategically? Look no further than this helpful guide—with these four strategies, you’ll have the confidence and know-how to tweak your portfolio until your nest eggs are Grade A and growing.
#1 Buy and Hold
This strategy is simple yet effective (not to mention self-explanatory). Buy and hold is all about, well, buying stocks and holding them until their value appreciates to your liking. It’s the ultimate waiting game, but one that could be extremely profitable.
Use an investment calculator to predict how much a certain stock might grow based on a few key factors—that way, you’ll know just how long you’ll have to wait before getting that sweet, sweet return.
Remember, the key with this strategy is patience. With buy and hold, you’re opting for long-term success with very little monitoring. In the meantime, go on a yoga retreat or take the kids on a bike ride.
#2 Growth Sector Investing
In the art of gardening, one must take a chance on young saplings so that, one day, beautiful plants may grow. The same goes for investing—sometimes, you have to take a risk on a budding new market in the hopes for tremendous rewards.
If you want to implement a more aggressive, yet still simple, strategy, just focus your attention on new growth areas in tech, education, healthcare, or any other market. An investor interested in capitalizing on demand for virtual accommodations might look into areas like these:
- Online learning for universities
- Video conferencing
- Virtual Reality
- Artificial intelligence
- Internet of Things (IoT)
You can invest in any market you want—if you predict growth, that’s where you put your money. While this strategy is great for investment daredevils who want to reap huge benefits from their predictions, it does come with higher volatility and more risks.
But if you do your homework, trust your intuition, and only put in a starting amount you are comfortable losing, then this strategy is well worth a try.
#3 Market Timing
If you are sitting at the edge of your seat staring at the DOW, maybe you could use a more hands-on strategy. Market timing is all about following different markets—or even specific stocks—and timing your purchases and sales to highs and lows in the market. It’s a tricky business, but it can yield fantastic results.
All you need is some market knowledge, patience, and a hawk’s eye. Also, you can forget the yoga retreat—for this strategy, you’ll need to keep an eye on the market on a daily basis.
Now is the time to take the age-old adage seriously: don’t put all your eggs in one basket. Stocks are like these proverbial baskets—if you put all your money in one stock (or one type of stock), you’re more likely to break your yummy eggs (and the bank).
That’s where diversification comes in.
To maximize potential earnings while reducing risk, you’ll want to combine the following types of investments:
- Mutual Funds
- Exchange-Traded Funds
In other words, you are adding some much-needed diversity to your portfolio. You can also look into investing in various different companies, markets, or sectors to ramp up the variety and improve your odds.
Be Brave, Be Wise
With the right strategies, some patience, and a clear head, you’ll have everything you need to make solid, intelligent investments without feeling flustered. Just make sure you’re thinking all of your decisions through, especially if you’re putting down a thick chunk of capital in your investments.
If you invest calmly and wisely, you won’t feel like you’re braving an angry storm—in fact, sometimes it just might rain money.