Have you been saving money for investment purposes? After all, investment is one of the most effective ways for people to build their wealth and secure their future financially. Who does not want to be prepared for emergencies? Making the right investments is key to accomplish this, but not everyone can be a savvy investor. Nonetheless, just because you do not have the knowledge and expertise to make investments does not mean that you have to be deprived of the opportunities of making good returns. If you are wondering what to do, you can use the following tips that investment expert Ido Fishman has shared for everyone:
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Don’t be afraid of a stock market crash
Even before 2022 began, there had been rumors flying around that the stock market would go down, which had largely been fueled by the emergence of the Omicron variant of the coronavirus. But, so far, the stock markets have held steady and are expected to continue the same way. In addition, Ido Fishman says that even if a stock market crash is on the horizon, it does not mean that you panic and waste energy.
Instead of doing so, your goal should be to focus on what you can do to get through this downturn unscathed. This involves ensuring that you have a diverse investment portfolio and giving your emergency fund a boost.
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Count on the power of the broad market
No one can predict what sectors of the market will flourish this year and those that will go down. But, things are easing gradually and are expected to get better, even with inflation running at an all-time high. Therefore, Ido Fishman suggests that it is better to invest in the power of the broad market rather than focusing on a particular sector or stock. For instance, opting for S&P 500 ETFs can turn out to be a smart move.
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Consider dividend stocks
One of the best things about opting for dividend stocks is that even when share prices fall, these stocks will continue to pay investors. Yes, growth stocks are very attractive, but Ido Fishman says that you should not forget that these stocks will not give you regular dividends. If you are looking for a hedge against a downturn in the market, it is best for you to add dividend stocks to your portfolio. Moreover, it is also smarter because it gives you a steady stream of income that you can actually reinvest down the road.
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Move cautiously when buying crypto
When it comes to crypto, there are a lot of investors who have managed to enjoy a great deal of success. Even if you are new to the world of investing, you can follow in their footsteps, but Ido Fishman says that you should not forget the risks associated with cryptocurrency. These digital currencies have not been around for more than a decade, while publicly trading companies have been around for hundreds of years.
Most importantly, Ido Fishman also advises caution because regulations are still in the works for the crypto space and this could have an impact on your investment from a tax standpoint. Thus, if you do decide to dabble in the crypto space, it is a good idea to take things slowly.
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Get as many tax benefits as possible
If you decide to invest in a traditional brokerage account, it ensures that you have unrestricted access to your funds and you don’t need to worry about any annual contribution limits. However, Ido Fishman says that make sure you make investments that can give you advantage in terms of taxation. This means taking advantage of retirement plans, such as IRAs. As long as you keep taxation in mind, you will be able to choose smarter investments for building your portfolio that can give you higher returns in the long run and not eat into your profits.