The Best Investments for the Beginning of the Year

| April 3, 2014 | 0 Comments


The beginning of every year traditionally begins with a New Year’s resolution or two (which you may or may not keep until the end of the year). One of the most common resolutions (and also one of the most frequently broken) is to get out of debt and save money. Now that we are well into the new year, it is a good time to check in on your investment goals that you set at the beginning of the year.

For most people, their financial goal is simple; save more money. But what about people who are trying to grow their income? What types of things should you consider when starting out a savings and investment plan? If you are new to the world of investments, it is important to understand that there is no such thing as a free lunch or a magic formula to success. Investing entails risks, including the possibility that you may lose some or all of the money that you put into the investment. Although this is true of all investments, this should not dissuade you from becoming a smart investor. The best investments for you to consider are in time, knowledge and those types of investment vehicles that are professionally managed and give you an insight on how the stock market and investments work.

Determining Your Investment Style

The best investment that you can make is in taking the time to learn what type of investor you are. Your investment style will dictate the types of investment choices you make and influence the decisions you make about your investment portfolio. If you do not take the time to properly define your investment style, you will find yourself chasing last year’s returns and investments that are at their peak only to trend down when you make a purchase.

You may decide that your style involves looking at the economy from a 360 degree view, using trends in employment, inflation and housing as an example to guide your decisions. You may be the type of investor who evaluates individual companies from their financial data (i.e. debt-to-equity ratio, income analysis, profitability, etc.) or from a historical price trend perspective (technical analysis). Knowing how you want to look at an investment will help you choose the right ones for your portfolio.

Become Market Savvy

Another great investment that you can make for the beginning of the year is an investment in knowledge. Market knowledge is key to understanding investments, how they work and where to find the information needed to make better investment choices. Traditional sources like the Wall Street Journal or the financial section of your local newspaper can provide good information for you if you are starting out. There are also great sources of information available to you online that are worth getting to know. Find a source or two that provides easy to digest information that you can use when making your investment decisions.

Consider Mutual Funds and Pooled Investments

What’s one last excellent investment that you can make for a new year of investing? How about a professionally managed fund. If you are a new investor, it is important to leave some of your investment dollars in the hands of professionals. Individuals who manage large mutual funds, investment pools and other types of pooled investment accounts are professionally trained in the nuances of how to make money. Employing the services of a money manager inside of a managed fund that is based on your investment style can provide you with the peace of mind in knowing that your money is working for you.

Ryan Delridge is a freelance financial blogger. With the new year already in full swing, he is eager to expand his portfolio, and has began researching oil will investment opportunities in his native Houston, Texas.

Category: Investment

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