The personal investment strategy is based on the investor profile. It shows which mix of investments best suits the corresponding profile and which investments should make up the portfolio. For example, an investment strategy focused on growth will include more stocks than an investment strategy based primarily on safety.
This is where the risk-return ratio comes into play: it states how much risk an investor can or must take in order to be able to achieve a certain return. Important: There is no high return without risk. So if you want security and returns, you have to make compromises on one point.
Nothing happens without diversification: Why more is more
The word “diversification” will come up over and over again for all investors. After all, it is also particularly important for a successful investment: Those who diversify their own portfolio spread and minimize the risk. Diversification means nothing more than distributing the money invested across as many different investment instruments, investment themes, regions, currencies, sectors, and countries as possible. Because if an entire region falls into recession, an industry crashes, or a currency collapses, all the money isn’t lost. Greater diversification also means more security.
You can read more about investment strategies on Magnate Invest Premium Bonds Blog. They have a huge content about investment, stocks, bonds, and portfolio diversification.
What do price fluctuations mean? Volatility simply explained
Another term that is particularly important for investors is “volatility”. Put simply, it measures how much security or index fluctuates around its own mean. A security that is very volatile fluctuates particularly strongly – and can therefore be worth very much and very little within a very short time. This gives anyone who wants to speculate in the stock market opportunities to make money – but also to lose money.
For investors who prefer safer investments and invest more conservatively, less volatile securities or indices are usually more suitable – or a mix that balances out the volatility somewhat. At the same time, the investment horizon also plays a role: in the long term, short-term price fluctuations are no longer relevant. So if you invest with a long investment horizon, you can choose more volatile investments.
Older investors need to know their investment strategy
Your own investment strategy should generally be reviewed regularly. Especially when your own life situation changes – for example, when you are about to buy a house, plan to emigrate, or retire is in sight. Investors over 55 should therefore check their current investment strategy with their advisor in good time and adapt it so that it also suits the new phase of life. For example, if you previously invested with the goal of providing for retirement, these goals can be adjusted somewhat after retirement. After all, it is no longer a question of building up one’s own wealth, but of preserving and consuming it.
Many retirees supplement their pension with a monthly allowance from their own assets. Accordingly, this part of the assets can no longer be invested in the long term but must be liquid. The remaining part of the assets can in turn be invested until this part is also consumed. Also relevant: The decision on the payment of the pension fund assets: should it be a monthly pension or a one-time capital withdrawal? Those who opt for the latter should also consider how the capital should be invested – and for what purpose.
Sustainability also when investing – that’s possible!
A sustainable lifestyle does not have to start with organic tomatoes and end with investments. There are now many ways to invest your own money sustainably. For example, there are sustainable investments in funds and ETFs. There are the so-called ESG criteria for this: companies that meet these criteria have a positive impact on our environment and our society (social) and are committed to responsible corporate management (governance). So anyone who wants to invest sustainably can do so relatively easily by investing in investments from companies that meet these ESG criteria.
Attention, fees! It costs money to invest
Who invests pays high fees that eat up returns? That’s not true. Of course, investments also require fees. Investors need a so-called custody account for their investments. This is where the money is parked, with which securities can then be bought. Banks and online platforms usually charge a relatively small deposit fee for this.
Which fees are then added depends on which investments are made? Anyone who buys a fund, for example, pays a one-off issuing commission and regular (e.g. annually) fees for the administration and management of the fund (Total Expense Ratio – TER). If you keep buying and selling shares, you pay transaction costs with every trade.
You can obtain a car from various sources. For many interested parties, going to the dealer is the easiest and safest way to buy a car. Buying offers on the Internet and newspapers is more tedious and involves additional risks. No matter where you find an interesting offer, you should consider a few things when buying a car.
Buying a car from a dealer through Auto loan pre approval
Above all, buying a car from a dealer offers security. The vehicles are usually in good condition and the dealer must give a warranty on the vehicle. This is required by law. Some extend this with a guarantee that provides security for longer. Some dealers offer a trade-in for the old used vehicle. You offset the sum with the new model so that the purchase price drops. This is practical for car buyers who want to get rid of their old used vehicle beforehand. But not every dealer buys old cars or only pays a low price.
In the case of old vehicles, some dealers try to make excuses with additions such as “for export”, “for tradesmen” or “sales on behalf of private” in order to circumvent their warranty obligations. You better keep your hands off these car dealers, because they are dubious.
Large car dealers offer a large selection of vehicles. You as a prospective buyer do not have to go to a new provider for every car. If you can’t or don’t want to pay for your next car in cash, you need an Auto loan pre approval or a lease offer. Major car dealers offer these. A comparison with other financing service providers is advisable. You have to remember that not every first offer is the best.
The disadvantage of buying a car from a dealer through Auto loan pre approval
The service at car dealers with the many services costs money. So cars from dealers usually cost more than used cars from private owners. In return, you usually get more security. Traders are professionals who know the market and are good at negotiating. And don’t be seduced by tempting loan offers. If you are considering financing, have a look at the terms and conditions of car financing.
Involving risk and selection are both casino gambling and investing. Both gamblers and therefore the investors must decide what proportion they require to risk and be willing to break down all if it doesn’t head to plan. Although definitions of both gambling and investing are seen to be very similar they most definitely aren’t.
Gamblers may have a selected interest in any casino games from slot machines, blackjack, poker, and roulette to several others. With each game, gamblers must carefully weigh the number of capital they require to place in. The chances are the simplest way of assessing capital versus the reward, the quantity of cash to risk compared to what’s already within the pot. If the percentages are favorable, the player is more likely to win. When it involves gambling and investing a key principle is to reduce the chance while trying to maximize potential profit. However with gambling, it’s over just having luck, and odds in your favor it’s about skill and patience in addition.
GAMBLING: A HOBBY OR SKILLED INVESTMENT TACTIC
Gambling is also a hobby and hobby to some, but to others, there has got to be great skill involved that must be built over time. Being an honest gambler and great at casino games isn’t as easy as some might think, if you’re feeling such as you want to require risks and gain rewards why not try having a play of this fun game to determine if you’re ready? Most gamblers will tell you if you would like to be a decent gambler you have got to own a grip so as to assist enhance your performance. If you’ve got a position then you’ll set yourself except the competition. Betting on the popular game whether that be slots (or 슬롯게임 in Hangul), poker, or the other classic casino game, as all good gamblers need to study behavior in some form.
ALSO READ: Ways of Investing Your Money to Grow it
Although investors need to study the behavior of stocks, it’s substantially different from gambling. Great gamblers can remember what their opponents have previously wagered, while, on the other hand, gamblers playing poker must seek cues from the opposite players at the table. Still, as having to be skillful, gamblers must be ready to study the mannerisms and betting patterns of their opponents and therefore the game to achieve useful information to profit them. Gamblers not only need to be able to read people, but they also need to be skillful likewise as being capable in danger management.
CASINO GAMBLER OR INVESTOR
As well as casino gambling is a good thanks to making some big winnings it’s an excellent variety of entertainment. Casino gambling could be a source of entertainment and most gamblers have a wise system in situ. Gambling could be a time-bound event while investment can last a few years as an enormous difference between investing and gambling is time. Whether or not a player has lost a previous game, gambling enables the identical players to own another opportunity to create a refund and more if they choose to. If you would like to be a successful gambler then you have got to be ready to read others, know the sport that you’re playing, be a fast thinker further as have the ability to cover your emotions. There’s lots more to casino gambling than many thinks, which is why only some are good gamblers.
Through a discussion paper published this month, the FCA is seeking opinions from the financial services sector about online offers of high-risk investments.
Actually, the Financial Conduct Authority launched the call for inputs last September 2020, to help shape the rules that the UK regulator plans to implement this year. The deadline set for the submission of feedback is set on July 01, 2021.
Although the FCA has recently published specific rulings over high risk financial products, the regulator admits to having limited power in pulling the reins over online brokers of high risk investments that are not registered with the FCA. Apparently, the FCA is referring to the offshore-licensed brokers that furnish web-based trading platforms.
The need to tackle the matter comes in the wake of numerous complaints coming from consumers who lost all their money on high-risk investment opportunities found and accessed online. In 2020, the FCA published a cautionary message to UK citizens about the risks of investing on financial products offering high returns, specifically those found by way of Google or Bing search engines, as well as those endorsed by influencers in Facebook and Youtube.
Specific Inputs or Feedback that the FCA Needs from Financial Services Firms
To make sure the new set of rules that the regulator will implement as protection for UK consumers, will be feasible for members of the financial services sector, the FCA is asking for views on three areas:
Views on whether the classification of high-risk investments should be subject to marketing restrictions. If so, views must include suggestions on the kind of restriction to apply.
Opinions on rules that would separate the high-risk investment market , as the regulator is concerned about the growing number of consumers investing in unsuitable high-risk investments.
Feedback about rules covering the responsibilities assumed by firms that support the financial promotions, particularly of unauthorised players in the country’s financial services industry. Firms like Google, Bing and online social media sites who approve the publishing of financial promotions of unlicensed endorsers, will play an important role in helping the FCA ensure that such promotions meet the standards in place.
Our Suggestion to UK Consumers
The FCA’s message of warning to UK consumers included reminders for them to carefully scrutinise those who offer investment opportunities found by way of search engines and social media sites, to make sure they are licensed by the FCA.
Our suggestion is to check out these financial intermediaries by way of online reviews that include information on whether the offshore-licensed broker is also a holder of an FCA license. We for one, gather information from the AskTrader website, whose team of analyst performs a review of robo-advisors and online trading platforms popular to UK citizens.
Our own research shows that FCA-licensed robo advisor platforms like True Potential Investor, invest only in traditional financial products, like corporate stocks, bonds, mutual funds and equity traded funds (ETF) on marketable securities and precious commodities. We gathered the same information from other true potential reviews we found online.