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Thinking of investing in 2020: here’s what you need to know

Thinking of investing in 2020: here’s what you need to know

New year, new opportunities…

We’re all guilty of making New Year’s resolutions we don’t stick to. You might start January with the best intentions to follow a strict new meal plan and exercise five times a week; but fast-forward to mid-February and most of us have fallen back into old habits. The gym has given way to gin and the running shoes have been tucked comfortably back into the cupboard for another 12 months.

Experts frequently comment on these short-lived resolutions, particularly when it comes to health and fitness. They recommend that, rather than buying into gym fads and diets that promise miracles, making simple yet significant changes to your lifestyle habits is the best way to see positive results for your efforts.

This logic also applies to 2020 investments. If you’re keen to make the most of opportunities in the New Year, it’s important to plan ahead and prepare for the long game. Here are our top tips you need to know to make investments work for you in 2020.

Review your needs

If you wake up on New Year’s Day ready to make good on your ambition to invest, the very first thing you need to do is ask yourself a simple question: what do I want from my investments?

Are you looking for long-term projects or short-term profits? How great is your appetite for risk and how far are you willing to push it?   

Answering these kinds of questions will give you a clear idea of what to aim for, putting you in a good position to start drafting an investment plan. Don’t see it as a challenge to be brave or rash; instead consider what you have at your disposal and how an intelligent plan might help you to work towards your targets.

Incorporate short-term and long-term goals

Much like a good business plan, an effective investment strategy needs to include both short-term and long-term benchmarks. Consider where you want your investments to lead you in a month, six months, a year, five years, and so on. Start at the end, outlining your ultimate goal, then break down the steps you’ll need to take in order to reach it. Keep unscrambling each goal into its smallest components, and you’ll end up with a clear step-by-step route to your long-term investment ambitions.

Set yourself a budget and stick to it

Overspending, or failing to spread your money wisely, is one of the most common pitfalls when it comes to investing. It may be possible to succeed in investing without a firm budget in mind, but you’re certainly making things more difficult for yourself. A budget is an investor’s best weapon, giving you a well-defined line that you know not to cross. Combining this with a clear investment plan will show you the best way to use your budget effectively – providing the scope for the breadth and depth of the investment.

Diversify your choices

One of the basic rules of investment is to minimise risk wherever possible, and diversity is widely accepted as a key player in this process. Diversifying your investments allows you to strike that all-important balance between risk and return, by spreading your budget across different kinds of investments and sectors whose prices don’t move in the same direction.

When you master the art of diversifying, you can smooth out your returns while reducing the overall level of risk within your portfolio.

Do your research before committing

Resolving to follow a diet plan on 1st January is rarely a decision that’s made with much planning. Instead, we tend to latch on to a promise of peak physical fitness and hope for the best.

If you wanted to take getting fit seriously, you’d have to put more work in – and we don’t just mean by squeezing out a few extra ounces of sweat. Instead, you’d have to research food groups, fitness routines, calorie intakes and lifestyle habits.

This is also true of investments. Making your money work hard for you over a 12-month period requires careful planning and investigation. You may have a gut feeling about an opportunity, but it’s important not to make any rash decisions.

If the prospect of investing your money makes you as nervous as a heavily loaded squat rack, you can always seek out independent financial advice from experts in the field. Talk to friendly team at Carrick Financial Management today.

You can speak to our team of independent financial advisers in Newcastle today by clicking here, or call us to find out more on 0191 217 0007.