Investing is not only an exciting way to grow your household income, but it can also secure your financial future. Experienced investors understand the many options available to them and can be a safe portfolio that balances risks and gains. On the other hand, new investors are sometimes guilty of building portfolios that fail to diversify and spread risks. If you are planning an investment strategy for the first time, you want to make investment safety a priority. What makes an investment safe? As it happens, safety depends on a variety of factors:
- Understanding risks that are not linked to market
- Relying on reliable knowledge
- Balancing quick wins vs long-term wins
- Avoiding known traps
Focus on actual safety
Cryptocurrency has been a buzzword for several years. However, new investors are still wary about a digital-only strategy. A lot of crypto fears linked back to cybersecurity awareness. Most of us have had an email or social media account hacked in the past. So if you are not familiar with crypto safety protocols, it’s natural to worry about your investment falling into the hands of cybercriminals. In reality, cryptocurrencies are fully secure as long as you pick a reliable platform. Users have a two-step authentication with every transaction that comes on top of the encrypted data. Additionally, it’s worth reading about the investment tax for your preferred solution. You need to understand how your gain will be taxed to ensure you don’t lose everything in a feud with your local tax and revenue administration.
Surrounding yourself with accredited experts
Ideally, you shouldn’t build your investment portfolio alone. Certified experts are available to help you make sense of your financial journey. One word of advice before you find a financial consultant is to check their qualifications, for instance, you’d expect from an Australian advisor such as Wayne Blazejczyk ASIC regulations. The Australian Securities and Investments Commission (ASIC) is an independent commission of the government that regulates financial services to protect investors. In Romania and the rest of the EU, the ASF regulates financial companies to protect the rights of investors.
Go slow vs. hunting quick wins
How much money can you make from your investment portfolio? The key with investments is patience. While this doesn’t mean that you can’t find quick wins, it’s important to establish the right balance between quick and long-term gains. Contrary to common belief, you can make a lot of money rapidly. Modern traders rely on technology to maximise short-term wins and quick market decisions. However, it can be a dangerous approach that makes you more vulnerable to rash decisions on a bad day. Additionally, you could be missing out on big returns, which are only available on long-term strategies. Experts agree there hasn’t been a negative 20-year period since 1950, which highlights the virtues of a long-term strategy.
A brief review of dangerous investments
Most investors choose to learn on their own time. If this is your case, you may want to check this list of the riskiest investments on the market. While even a risky investment can be profitable for an experienced investor, beginners should avoid putting all their eggs in a high-risk basket that requires hands-on management.
Investment safety depends on external factors that aren’t in your control, such as market fluctuations. However, you can control how you protect your assets, from working with certified experts to understanding how time impacts your gains. The last thing you want is to put your capital at risk through frauds, missed taxes, or impulsive short-term decisions.