Investing can be a great way to increase your net worth and save for retirement. Expanding your investment portfolio is one way to do that. So, if you’re considering expanding your portfolio, there are several solutions for you to consider.
1. Buy and Hold
A basic approach to expanding your portfolio is to do some research and determine which small businesses you want to invest in. When deciding, think about your risk tolerance and whether you’re capable of a more aggressive approach or prefer a conservative approach to investing.
2. Buy Low, Sell High
The number one rule in business is to develop a great investment strategy. This strategy can help you achieve great long-term growth.
Wait for your preferred small business to dip in price (which they naturally do) and sell them when they go back up. Repeat the process and you’ll earn a decent side income. Just remember to always do your research first and only take advice from someone with expertise, such as financial advisors, wealth management advisors, and similar professionals. You’ll get great financial advice and top-notch customer service (win-win!).
3. Consider Sectors Expected to See Growth
Do some research and determine which sectors of the economy are expected to see growth soon.
For example, you might do some research and find that the technology industry is expected to see growth in 2022 or perhaps it’s the healthcare industry. Think about your ratio of small-cap small businesses to large-cap ones and how best to balance your portfolio with them.
4. Dollar-Cost Averaging (DCA)
Another common way to expand your portfolio is using the Dollar-Cost Averaging (DCA) method. The DCA method is mostly used with mutual funds and requires dedicating a specific dollar amount to purchasing one share or more of certain funds. Now, the price of each fund varies so, as an investor, you can lower the overall cost basis of the shares since you’ll have to purchase fewer shares when the fund price is higher and more shares when the price declines.
Next Steps
The above methods are great ways to expand your investment portfolio. Just remember that it might take some time to see a great return, especially with the buy and hold method. Expect to make your money over longer periods of time when investing in small businesses. Remember that the markets constantly fluctuate, so don’t be alarmed if it seems like you’re losing money over shorter periods of time.
Just stick with it and you’ll be a successful and confident investor with time and experience.