3 Best Investment Strategies to Consider to Meet Your Finance Goals
It goes without saying that traditional savings accounts aren’t enough to grow your money. As a type of investment, savings accounts are one of the safest places to put your money. The funds are liquid, so you can withdraw whenever and without penalties. However, these accounts are low-yield — typically, you'll only earn between one and two percent interest each year. Plus, you won’t benefit from tax cuts because your income will already be taxed, and you’ll have to pay tax on all interest earned. As an alternative to low-yield savings accounts, there are many other ways to invest your money, some of which are better than others. In this article, we provide a brief overview of the different types of investment strategies and then dig deep on three you might want to consider. Lastly, we provide some investment strategy examples to give ideas you can apply to your wealth-building. As always, getting in touch with a professional who can marry investment strategies to your life goals through comprehensive wealth management. You may not realize it, but there are many ways to invest your hard-earned money. The different types of investment strategies include: These investment tools vary widely in terms of potential returns, costs, and risks. There’s no one-size-fits-all, so what works for one person or situation may not work for another. That’s whyit’s vital to choose your investment strategy wisely. Many people first look at stock investment strategies, but various ways exist to create a diversified portfolio. The approach to take with your money depends on a number of factors. Regardless, the goal is to choose the best investment strategies that help you meet your financial goals by maximizing returns and minimizing risks. This could be accomplished through value investing, growth investing, or income investing. Value investing is like shopping for bargains at your favorite store. Many companies have share prices that don’t reflect their growth. Eventually, the share price catches up with company growth. Although these companies don’t focus on rapid growth and expansion, many pay dividends. Compared to some other strategies, value investing is a lower-risk option with fewer associated costs. You can take growth investing by seeking out companies that are expected to grow faster than others. This growth is based on revenues, cash flows, and profits. Companies that fit this investment strategy prioritize development and reinvest their earnings by acquiring new employees, equipment, and businesses. Growth stocks have a higher risk and are more expensive. They may be more suited for risk-tolerant, long-term investors. Income investing is a strategy where you purchase investments that produce cash payouts. These payouts may be in the form of dividends or bonds and are in addition to regular returns. You can either keep the cash or reinvest. Dividend and bond payouts can be found in individual dividend stocks, index funds, and EFTs. Income investments are often a good choice for those looking to grow their fixed income. If you’re unsure where to start or level up investing, here are some examples that may give you ideas to think about. You have many options and can choose investment approaches based on your interests, age, values, and other factors. Start investing early, have a financial plan, diversify your portfolio, and don’ttry to time the market. Set it up and forget it — rebalance only when necessary. There are many reasons why you shouldn't do your own investing. Getting advice from a financial adviser who can guide you from planning to managing your investments is best. Whether you’re young or old, a beginner or experienced, conservative or aggressive, there are many options for investing. That's why we recommend reviewing your options with a professional and considering how each strategy can help you achieve your goals. Business investment strategies, investment strategies by age, and alternative investment strategies are a few investment strategy examples that might fit your goals. One thing to note: taking a do-it-yourself (DIY) approach isn't recommended when it comes to investing. An advisor can help implement or manage these investment strategies. Either way, a good rule of thumb is to keep it simple. At Plancorp, we have a Wealth Management team of financial advisors, planners, and consultants with first-hand knowledge in a variety of investing strategies. If you’re looking for a better investment experience, contact us today! Not sure where to start? Check out our financial analysis to receive customized content recommendations based on your goals.Types of Investment Strategies
3 Investment Strategies to Consider
1. Value Investing
2. Growth Investing
3. Income Investing
Investment Strategy Examples
Final Thoughts
