Thinking about investing this year? If so, congratulations. You’ve taken a big step in planning your financial future. Only 30% of Americans have established a long-term financial plan that covers investments and savings goals. So, what can you do to make your money grow faster this year?
If you take some time to do the research, investing some cash now could help you out tremendously along the way. Here are some of the top investment tips for 2020 and how they can help set you up for future financial security (if done correctly).
Tip 1: Do Your Research
When thinking about investment tips for 2020, one of the first things you should do is do your research. This is especially important if you’re a first-time investor. Research what investing is, and how you can navigate it successfully.
There are multiple ways you can research investing in 2020. Luckily, we have the internet at our finger tips and can conduct research easily. You can research financial blogs, follow financial experts on social media, or even chat with a seasoned investor online. You can also get input from friends and family who have invested before and get their opinions and tips.
Tip 2: Decide What Kind Of Investor You Are
Once you do your research, you should take time to determine what kind of investor you are. When it comes to investment tips for 2020, this one could give you a lot of valuable insight into how you will invest.
Usually, there are two kinds of investors you could be. You could be an active investor, or a passive investor. An active investor is someone who has more control over their stocks. They tend to do a lot of market research and make active decisions on what to invest in. Passive investors are the opposite. They typically want to invest, but don’t have the time to monitor the market. They trust their brokerage or financial advisors to invest for them. Passive investors may also rely on robo advisors to make investments for them.
There are pros and cons to each kind of investor. As an active investor, you have more control over your investments. However, you have to do a lot of research and watch the market closely. As a passive investor, you get to be less hands-on with your investments and may not have to do much, but you could miss out by not paying attention to the market. In the end, determining what kind of investor you are depends on your goals and the amount of time you have to dedicate to your investments.
Tip 3: Find The Right Brokerage
Once you decide it’s time to invest, find a brokerage that works best for you. The kind of brokerage you choose depends on how much you want to invest, what level investor you are, and how in control you want to be in with your investments. There are some brokerages that require very little money to start investing, however there are some brokerages that require you invest a higher minimum investment.
When looking at brokerages, you look into if the brokerage charges management fees. Some brokerages have lower fees, while other fees can add up if your money grows. You should also look into how much of a return these brokerages get their clients on average and reviews from clients.
Tip 4: Explore AI and Tech
One of the most important investment tips for 2020 is to keep your eyes on AI (artificial intelligence) and the tech space. AI is software that’s designed to do the tasks people typically do. AI has been in our lives for decades, especially since the computer was developed. Many companies use AI to get business done faster and cheaper, and that trend is only projected to go up in the future.
If a company needs to get a certain tasks done, such as computer technical support, they may opt to invest in AI so they don’t have to pay someone a salary and benefits to do it. The more AI develops, the more likely we’ll see it merge into every industry as a way for corporations to save money.
Technology is always developing, so it’s worth exploring the tech world and seeing where you can invest your money. Some of the most sought after stocks are in the tech space, including stock in Apple, Amazon, and Microsoft. The tech industry is projected to keep growing, so investing in it now could help you make more money in the end.
There are a couple of routes you could go when looking at tech companies to invest in. You could go for the bigger tech names and invest your money there, or you could invest in a tech stock that has a niche and in-demand audience. It could be a website design and development company, an upcoming streaming platform, or the latest social media app. Whatever it is, do your research and see if the demand is there and if it can last long-term.
Tip 5: Look Into Real Estate
Looking into investing in real estate could be one of the best investment tips for 2020. However, the industry is lucrative, so it’s crucial you do your homework before investing in a property or any real estate stocks.
There are multiple ways you can invest in real estate. You could buy a property upfront, which would require you to provide a cash down payment. Usually, you want a down payment of 20%, however, there are loans that require as little as 3.5% down. If you’re struggling to find a typical real estate loan, you could also look into a hard money lender and see what your options are there.
If you don’t want to fully invest in a property just yet, you could also look into investing in a real estate investment trust, also known as a REIT. A REIT allows you to buy real estate properties and manage them, but typically in the form of commercial real estate fixtures like apartments, malls and hospitals. This could work for you if you want to test the waters in real estate investing.
As your real estate investments grow, you may realize you want to invest in all aspects of real estate, from the home builders to the interior designers who help put the homes together. That would take another level of investment and development, but if the market is right, it could work in your favor.
Tip 6: Research Healthcare Investments
People will always need healthcare. That’s why investing in the healthcare industries could be one of the investment tips for 2020 that, if done right, could work out really well for your portfolio.
There are a number of ways you can invest in healthcare. You could invest in healthcare services, healthcare companies, urgent care centers, a home healthcare agency, or the pharmaceutical industry. All these aspects relate to healthcare, so you’ll have to determine which facet you want to put your money in.
Another facet of healthcare to look into for investing is biotech. The healthcare industry is evolving with the help of technology. If you find the right biotech company to invest in, you could see a good return on your investment. Another tip is to look at what’s in demand now in the wake of the coronavirus pandemic. The healthcare industry is learning a lot from the pandemic, and out of it may come a need for the next big healthcare tech or service. Pay attention to this, because if you get in early on it, you could see many benefits from it. Even smaller businesses, like a home healthcare agency, has started using these aspects of technology to streamline home care.
Tip 7: See What Start Ups Have To Offer
When thinking about investment tips for 2020, don’t forget to look into startups. Yes, investing in startups can be risky, but there’s also a chance that 2021’s best company could still be in startup mode right now.
When looking at startups, the first thing to do is research the company and its products or services. Do you think there will be demand for what they’re providing? If so, how long do you think it will be in demand for? Also, it’s important to look at who their target audience is, and if that target audience will be around long-term too. For example, if you see a startup that pairs marketing consultants with companies who need marketing projects done, ask yourself if you see the marketing industry as sustainable. If so, research further. If not, you may want to move on.
Another aspect to look at when researching startups is seeing if other people are investing in it. If a startup has a decent investor list, it may be worth exploring further. Now, that’s not to say that a startup has to have a list of investors in order to be valuable. Sometimes, you can get ahead of the curve and invest in a startup that has a lot of potential. It all comes down to if you think the product or service will be sustainable in the market. It’s important to note that investing in startups is risky, so invest at your own caution.
Tip 8: Keep An Eye Out For Trends
Out of all the investment tips for 2020 to remember, this is one of the most important ones. When investing, keep an eye out for trends in the market. If you notice a certain industry is poised for a boom, see if you can invest in that market before the boom happens. Identifying and capitalizing on trends is essential when investing.
You can research and identify trends in a number of ways. There are multiple websites that can help you track a stock’s value, such as Yahoo Finance. You could also follow experts in the finance world and see what they think is trending and then research it yourself. You could also use cycles as a way to predict trends. For example, if winter is coming up, will the value of heating oil increase? If so, it could be worth investing in before the demand hits. Identifying trends will help you grow your money quickly, without many bumps in the way.
Tip 9: Diversify Your Portfolio
While there are ways you can invest wisely, investing still poses a risk. Your risks may work in your favor, but they could also backfire. That’s why it’s important to have a diverse portfolio when investing in 2020.
Having a diverse portfolio helps you minimize the risk of investing. If you put all your investments into one industry or project, you risk losing your investments if it declines. That’s why it’s recommended to have a mix of stocks and bonds in your portfolio, since both these investments react differently to economic events.
Remember, having a diverse portfolio means you have backup in case one of your investments doesn’t work out. You’ll be covered if something declines, and who knows, your other investments could end up soaring while others fall flat. It all depends on a number of market factors, but with a diverse portfolio, you increase your chances of keeping your money growing.
Tip 10: Monitor The Market
You can read all the investment tips for 2020, but these tips won’t really help unless you monitor the market. Even if you’re a passive investor, take some time each day to see how the markets closed and which stocks are performing the best. If you don’t monitor the market, you risk making poor investment decisions and possibly losing money. There are people who have lost everything due to this. If you lose your money and realize you can’t pay your bills, you may want to contact a bankruptcy attorney to see what your options are.
Investing can be a great way to watch your money grow over time. However, it takes time and discipline to invest wisely. By using these top investment tips for 2020, you’ll have a foundation for what trends to look for and what industries to research. If you invest wisely, your money could grow faster than ever before. Remember, investing can be risky, so be sure you acknowledge the risks before taking action.
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