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5 New Year's Resolutions for Investors

5 New Year's Resolutions for Investors

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Thursday, 04 January 2018 04:53 PM Current | Bio | Archive

A new year means a new start for everyone, even investors. Many investors benefited well from the gains stock markets made last year, and they’re certainly hoping for more of the same this year. But no matter what your investing experience is, here are some resolutions for the new year that can benefit everyone.

1. Plan to Start Saving

If you don’t have a plan yet to save, start one. Compound interest is the key to accruing a large amount of money to retire on, so starting your saving early in your career is key. Starting to save for retirement at 22 will leave you much farther ahead when you turn 65 than if you only start at 32. That extra decade of saving can mean hundreds of thousands of dollars by the time you retire.

If you’ve already started saving, make sure that you have a focused, directed plan with measurable and achievable goals. Saving without focus isn’t as bad as not saving, but it’s still wasting time that could be put to better use in planning for your retirement. Your savings plan should be focused on building up assets for retirement, a down payment on a house, college tuition, or whatever goal you decide on. Establish that goal and then structure your savings and investments to achieve that goal rather than just haphazardly accumulating money in various accounts.

2. Invest With an Open Mind

Who would have thought that Bitcoin and cryptocurrencies would have broken out in 2017 like they did? Not many people, that’s for sure. But those who chose to invest in cryptocurrencies earlier in the year made out like bandits when prices took off.

That’s why it’s important to invest with an open mind. Don’t just dismiss an investment opportunity because it’s new or because it’s something that not everyone else is doing. Going with the herd can mean missing out on great new opportunities for asset appreciation.

3. Rethink Asset Allocation and Diversify Your Portolio

Many American households rely on the good old 401(k) plan as their sole means of retirement savings. And while any savings is better than no savings, just investing in a 401(k) isn’t going to give you access to all the variety of savings and investment options that are open to you.

Stock market bubbles have caused many investors to focus on stock price appreciation as the sole indicator of the health of their retirement portfolios and as their sole goal. But what about dividend investing? Many an investor has built up a good supplemental income through investing in dividend stocks, an old-fashioned strategy that has been overshadowed in recent years.

And keeping all your money in one or two plans, or a handful of stocks, is not adequately diversifying your portfolio. Even investing in numerous stocks, several mutual funds, and a number of bonds isn’t good enough. Both stocks and bonds are subject to the whims of financial markets, so when Wall Street falls on tough times so too will your investment portfolio.

4. Crashproof Your Portfolio

The recent bull market in stocks has many investors understandably nervous about a future stock market crash. The memory of 2008 and the more than 50% drop in stock indexes during the financial crisis is still seared into the consciousness of many investors who were badly burned back then.

That’s why diversification is so important, to ensure that you don’t have all your eggs in one basket. Sure, stocks, bonds, CDs, mutual funds, and other mainstream financial assets will make up the bulk of just about every investor’s portfolio. And when stock markets crash, as they inevitably do after every stock market bubble, everyone is going to experience some losses. But a properly diversified portfolio that invests in assets such as gold that perform well when financial markets are doing poorly will suffer smaller losses than one that is completely dependent on the health of stock and bond markets.

5. Take a Serious Look at Alternative Investments

“Alternative investments” is a catch-all that encompasses just about every asset outside of stocks, bonds, CDs, and the usual financial assets that you can purchase from just about every broker, i.e. anything aside from equity, bonds, or cash. That includes gold, silver, real estate, asset-backed securities, cryptocurrencies, etc.

Because these assets aren’t the target of millions of mainstream investors, there are still some amazing opportunities for asset growth. Not only can alternative investments offer you great asset appreciation, but they can also help protect your portfolio in case of an economic downturn. For that, there’s probably no better alternative asset than gold.

Gold has been trusted for centuries as a store of wealth and protection against financial calamity and continues to serve investors well. Since President Nixon closed the gold window in 1971, gold’s price has grown more on an annual basis than both the S&P 500 and the Dow Jones Industrial Average. And a portfolio allocated 30% to gold and 70% to assets matching the S&P 500 would have lost far less money during the worst part of the financial crisis than a portfolio 100% dedicated to matching the S&P 500. Even today, after two years of record-breaking stock highs, that portfolio holding 30% gold is still worth more than one solely devoted to matching the S&P 500.

With a gold IRA, investors can even benefit from the same tax advantages as traditional IRAs while simultaneously enjoying gold’s protective abilities. So if you want to protect those great gains you made last year, take a good hard look at investing in gold.

Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.

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A new year means a new start for everyone, even investors.
gold, ira, investment
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2018-53-04
Thursday, 04 January 2018 04:53 PM
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