The reality is, investing takes time and discipline. The hype and complexity with investing makes it more fast-paced and complex then it needs to be. What is suppose to make investing exciting, can instead make it confusing and for some, anxiety provoking. But fortunately, there are a few simple key things to follow that will help your investment grow steadily based on the time, effort, and savings you put into it.
The worst thing you can do is take on excessive risk with your investments. A buy high, sell low strategy hardly works for the most talented of fund managers, and has never been a winning strategy to grow your wealth. It is neither helpful to sell stock in a panic when you see a dip in the market. This type of investment strategy of high-risk, high-reward, is clearly based more on guesswork than research.
The most sustainable, long-term investment strategy is to diversify your investments and develop a portfolio plan that involves depositing a set amount of your income on a regular basis. Part of managing your investment portfolio also involves determining your goals and risk-level. Depending on changing life conditions, your goals and risks could also change. Nevertheless, the act of making regular contributions within a diversified portfolio—regardless of the amount—is one of the best things you can do to manage and grow your wealth. Speculating rarely allows you to consistently compound the returns on your investments as does diversification, and in the end, it is compounding that is going to grow your wealth. For most, a buy-and-hold strategy is a much more sustainable long-term investment approach
In fact, investment vehicles like ETFs and low cost mutual funds are perfect for gaining diverse exposure to a range of securities, while incurring solid long-term returns at a low fee and cost. But whether you use ETFs or low cost mutual funds, remember to rebalance your portfolio ever 12-18 months. This might mean reallocating your assets by selling poorly performing securities or reinvesting the earnings from well performing ones. Either way, maintaining your planned asset allocation, regardless of the ups and downs of the market, will help ensure you remain at appropriate risk levels which you are comfortable while you grow your investments.