Many savvy investors who follow Agora Financial’s advice make profitable decisions. In addition to predicting the bankruptcy of American Airlines, the publishing company predicted the tech and housing bubbles before they happened. Agora Financial is known for sharing bold but correct predictions. Also, the company believes in equipping readers with the necessary tools for success. These are some of Agora Financial’s top tips for investing in the future.
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— Agora Financial (@AgoraFinancial) March 4, 2018
1. Learn Investing Basics
While some people choose to let the professionals handle most of the details, others prefer to do the research and analysis themselves. Agora Financial encourages investors to learn the basics about investing even if they plan to rely on professional help. When people learn investment basics, they have more control over their money.
2. Set Long-term Goals
Setting long-term goals is the key to developing short-term goals. Long-term goals can be anything from buying a new house in 10 years to building a comfortable retirement savings. Agora Financial encourages investors to list their long-term goals in a prioritized order.
3. Set Short-term Goals
Short-term goals usually have a time limit that is under five years. Saving for vacation and saving for a set of new tires are examples of short-term goals. When long-term goals are set, investors can set short-term goals that relate to them. For example, an investor may set a goal to finish a home improvement task every year if he wants to increase the value of his home before he tries to sell it in 10 years.
4. Study Long-term Investments
Most people who are new to investing do not know the differences between types of investment vehicles. For example, a person may not know the differences between a 401(k) and an IRA. Agora Financial encourages new investors to learn about each long-term option. While one long-term investment vehicle may be ideal for one person, it may not be ideal for another. Agora Financial encourages all readers to understand how each option relates to their unique circumstances.
5. Study Short-term Investments
For those who need money within the next five years, short-term investment vehicles are ideal. When people take money from long-term investment accounts, it often leads to tax penalties or costly fees. These are some examples of short-term investment options:
- Certificates of deposit
- Money market accounts
- Real estate investments
Each type of account has advantages and disadvantages, and a person’s individual financial situation dictates which types of accounts are optimal. For new investors, Agora Financial recommends working with an experienced professional when choosing short-term investment vehicles.
6. Keep A Safety Margin
Keeping a margin of safety means buying a security at a lower price in relation to its intrinsic value. This minimizes investment downside risks and yields higher returns. With value investing, investors have the potential to see substantial profits when a stock’s price returns to fair value. If a company falters, a safety margin provides protection for the investor. As a rule, most investors find that undervalued stocks do not usually continue to decline significantly.
7. Profit From Volatility
Every investor should expect volatility and should know how to profit from it. While some investors get scared during downturns and look for a way out, good investors look for opportunities. Agora Financial encourages investors to avoid making emotion-based choices. Investors should evaluate a company’s value using rational measures and facts, and those elements should be the sources for forming estimates.
Another valuable tip from Agora Financial is to only buy when prices are sensible. If a price climbs too high, it is time to sell. Wild market fluctuations are inevitable, and those periods provide opportunities for finding bargains. One strategy is dollar-cost averaging. This involves buying investments of equal dollar amounts at regular intervals. Another strategy is investing in bonds and stocks. Agora Financial encourages investors to balance their portfolios equally with stocks and bonds. Capital preservation is the key, and growth is possible with smart choices.
8. Be A Self-aware Investor
Investors may be passive or active. An active investor spends a considerable amount of time doing research and analyzing returns. Active investors usually see larger returns since they spend more time researching. Passive investors are content with smaller returns and do not invest as much time researching and analyzing their choices. For those who do not have time to perform research, an index investment is a profitable option. Expert investors such as Warren Buffet say that getting even an average return is an accomplishment. Small investors often choose investment companies such as USAA, Vanguard, Ally Bank and Scottrade.
9. Mitigate Long-term Risks
Reviewing a portfolio frequently is important. Investors may need to shift their focus in one direction or work on diversification periodically. They must analyze the performance of each stock and determine why any stocks with poorer performance patterns are suffering. Also, investors must review their long-term goals and retirement accounts. For example, a person who signs up for a 401(k) may initially use the risk assessment tool but may not update individual preferences over the years. Age-risk correlation and account balancing may be negatively affected in this instance.
10. Make A Life Plan
Research shows that people who do not find a purpose in life have poorer health. Successful investing will not feel as rewarding without a plan for the money and positive life goals. Agora Financial encourages investors to identify a purpose in life, set goals around it and continually work toward those goals physically and financially.
Follow Agora Financial for more investment advice. The publication maintains its independence and offers unbiased advice from experts who have proven records of success with bold predictions. Agora Financial was founded in 1979. It does not accept money to recommend specific entities, and the editors keep investors informed about all crucial components of financial markets. They explore controversial topics and offer honest advice from entire sets of facts.