Share
Why You Still Need an Investment Strategy in Your 30s

Why You Still Need an Investment Strategy in Your 30s

Those between 30 and 40 years of age are likely focusing upon day-to-day business operations, supporting a family, securing a home and other logistical necessities. While these are all very real concerns, they can also detract from the bigger picture. Will you have enough money when you reach the age of retirement? How do you intend to pay for your child’s education? Are there any possibilities to avoid taking out a second mortgage in the future? Some of you will probably choose to answer these questions by addressing various ways to make prudent investments. But this kind of success involves just as much preparation as it does perspiration. Below we look at some of some investment ideas you may turn to and how to better navigate them:

Currency Trades

The Forex markets tend to appeal to the millennial generation because they are highly liquid. This essentially signifies that profits can be realised in (relatively) short periods of time. Smaller trading positions will add up and this wealth can then be either pumped back into other positions or set aside as a personal financial “buffer”. However, we should also mention that liquidity is associated with a greater amount of risk. Losses can and will occur. It is therefore important to limit your exposure as opposed to going “all in”.

Stocks and More Stocks?

It’s ironic that many young investors are wary about becoming involved with stock trades. Studies have shown that a portfolio predominantly comprised of stocks sees an average annual return of approximately 10.8 per cent. This is in direct contrast to the four per cent often associated with bonds alone. So, it is wise to allocate a sizeable portion of your funds into stocks. Blue-chip entities are wise choices, for they tend to be less volatile than small-cap holdings or any firms located on the so-called “pink sheets”.

Trading Index Options

Indices are another area young investors consider when developing a trading approach. Their main benefit is that your risk will be spread out as opposed to being allocated into a single position. The primary downside is that profits tend to accrue over longer periods of time and a reversal may cause a holding to remain stagnant for months on end or longer. Some common examples of indices include the S&P 500, the FTSE and the Dow Jones Industrial Average (DJIA).

If you are just starting out, it is wise to trade indices which are price weighted as opposed to capitalisation weighted. The status of a price-weighted index is determined by the entire value of the market including individual stock prices and any share splits. These indices are generally easier to follow and the chances are high that you will be able to spot medium-term trends.

Accessing the Right Assets

We advise you to build a strategy before you decide to invest in these options, as a beginner, you want to focus on a maximum of one to two stocks, learn the Importance of creating a trading plan and if you are an absolute beginner we recommend brushing up on core terminology.

The primary advantage that you possess involves the availability of high-speed Internet, trust us you’ll need this, as well as help from experts within this field, which all highlight the that most important point is that no matter your age, beginner investments should always be thought out and making the correct investment decisions for you now will provide you with a sound financial status right into the future.

Leave a Comment