The core of every investment plan is the question why invest. Asking “why?” helps a lot in determining “how?”, because objectives must be aligned with appropriate opportunities. For example, someone who is willing to risk some of their capital to earn high returns will have a very different view than a more conservative-minded investor whose primary goal is protecting their capital. Both types of investors will favor different opportunities.
The current state of the global economy makes investment opportunity analysis and detailed strategy more important than ever. In 2016, the geopolitical landscape changed significantly with Brexit and the election of Donald Trump; this influences every investment decision.
In a changing and uncertain geopolitical environment, here are some key points for investors looking for suitable opportunities to consider, regardless of their investment profile:
Know your objectives
Is the investment for retirement or a short-term goal, such as financing the purchase of a home or a child’s college education? The answer to this question provides significant information about the types of options that are appropriate. Strategic planning for pensions, for example, comes down to a broader investment horizon. Typically, a retirement plan will invest in a basket of options, ranging from stocks and real estate to government bonds. The goal is to maximize returns while covering the total value as time passes.
Raising money for a down payment on a home may even require safer investment options because the investor wants their capital to be guaranteed. On the other hand, other investors may be willing to risk more capital for the chance of higher returns.
Read the literature
Knowledge is power – and in the investment world, the right knowledge can go a long way. For example, the business cycle for the pharmaceutical sector will look very different from that for the food and beverage sector. Reading case studies and articles from people who understand the investment industry and have had previous experience in the sector can be a great way to gain insight into what works and what doesn’t. For example, building on founder and executive chairman Ken Fisher’s proprietary investment advice guides, the “Fisher Investments on” book series discusses financial topics and investment sectors to help investors become better informed about the nuances of each sector.
By building on this knowledge over time, an investor can understand what differentiates one economic sector from another, whether certain markets are worth investing in, and determine the best time to act on them.
Stay up to date with what’s new
New investment opportunities are constantly emerging and that is why smart investors always try to stay ahead in that area. Most business innovation today is driven by technology. At the same time, technology is being used to revive the old way of doing things. For example, delivery drones are now used to transport small packages. Investing in such opportunities can mean taking a chance on an individual company. Of course, there is also an element of risk involved compared to other investment vehicles.
Listen to professionals
Seek expert advice from financial professionals, even if it’s just to get a second opinion. Industry professionals have the kind of knowledge and experience that lay investors do not have. As a result, they are often in a position to uncover important market trends for the general public.
Be patient
In a global economy that is growing slowly, it is only natural to harbor a gloomy outlook. However, there Are growth areas that exist. Over the longer term, solid investment opportunities are likely to deliver strong returns. This is true even if there is instability and underperformance in the shorter term.
Remember, a well-thought-out investment plan, backed by research and expert advice, is a smart plan to generate strong returns on all assets.
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