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Making the most of investments

Making the most of investments

With inflation eating away at the value of many Americans’ savings, it’s definitely wise to think about putting money in a more returns-friendly financial services product rather than leaving it to languish in the bank. From stocks and shares to contracts for difference (CFDs), there are plenty of choices available when it comes to building value. However, it’s important to be savvy about investing, and to make the most of the opportunities on offer – if you don’t, then you may find yourself left with stagnating profits or even losses. Here, then, is a summary of some of the options that you could take.

Consider alternatives to stocks

Traditionally, stocks were considered the main way for a retail investor to go. However, with the surge in popularity experienced by options, futures and derivative products, there are now all kinds of choices available. CFDs are a popular choice because of their simplicity: they’re easily traded, and an account can be set up in just a few hours. They also offer a diverse range of shares, indices, forex pairs and more. It’s important to find some CFD trading strategies that work for you before plunging into CFD trading, though, because their reliance on leverage – which can both enhance profits and also increase losses – means that they’re often risky.

Play the long game

Some investors, such as swing traders or day traders, take a short-term view of their investments by buying and selling them within the space of a few minutes, hours or days. While this kind of trading can allow the trader to make the most of small-scale price changes, it’s both time-intensive and somewhat risky. This is because when it comes to investments, time is often the greatest healer: a well-diversified portfolio can suffer in the course of a few days, but some market dips end up reversing over time and delivering healthy returns. If you’re able to tie up your money for a long period of time, then it’s often worth considering.

All at once?

Another strategic consideration to make to get the most out of your investment is the timing of new instrument acquisitions. If you have $10,000 to invest, then you could put it all onto the market in one go as a lump sum. However, you could also drop it in in $1,000 chunks over, say, 12 months. This way, you’ll have more chance to benefit from buy prices hopefully being lower at least some of the time across the course of the year.

Leaving your savings in the bank is no longer a sensible – or, indeed, sustainable – option. As a result, setting up investments is a wise move – and then making the most of them once they’re up and running is also a key. From thinking strategically about your investment timeframe to looking beyond shares for an alternative instrument, there are lots of ways that you can make your cash work for you.

Mary Aaron

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