Tips to Make Your First Investment After a Hiatus a Successful One

In times like today, when people are recovering from a global financial crisis, investing can sound intimidating. After all, it’s human nature to think twice before taking a risk. And when you consider that just the previous year, so many businesses have failed, the skepticism increases further. In fact, several studies conducted on millennials and Gen Z have shown that both groups are currently hesitant about investing.

Unsplash | Studies conducted on millennials and Gen Z have shown that both groups are currently hesitant about investing

Analysts reckon that such a global pullback from small-time investments can have grave repercussions on the long-term financial goals; that too, not just from a country’s economic perspective, but also at the individual saver’s level. Supporting their assumption is a study from Standard Chartered, which states that more than half of the savers in rapidly growing economies are likely to miss their retirement plans by fifty percent.

Sounds scary? We agree that it does. But thankfully, there’s still time to do something about it. Here are a few expert tips that can help you get started with investments again.

Set a target

The golden rule of investment is not to be impulsive. As per the expert’s recommendation, it’s crucial to find out the reason behind investing. Syfe CEO Dhruv Arora suggests that you should focus on a fixed goal, like a wedding or retirement, instead of numerical figures. He says that one should always be scientific and use an online calculator to figure out the proportion of withdrawals from your income.

Read – Companies That Are Expected To Yield Great Returns Over The Decade

Unsplash | You should focus on a fixed goal instead of numerical figures

Ascertain your timeframe

Once you know your motive, the path to investment becomes evident. Now all you need to figure out is your timeframe. Most financial advisors suggest using a 50/30/20 scheme, which allows you to use 50% of your salary for paying living expenses, 30% for wants, and 20% for savings. But although this plan is good, there isn’t any rigid rule that you have to follow it. You can create a better strategy as per your target and timeline.

Are you a risk-taker?

The third step is to figure out your risk tolerance. Steve Brice, the chief investment strategist at Standard Chartered, says that different sections of people have different risk tolerance, and one should take several tests to know how much risk he or she can take. Investors should be true to themselves and should never go for a plan which they feel is dubious.

Unsplash | One should take several tests to know how much risk he or she can take

Expand your horizon

Usually, first-time investors prefer index funds, but experts say that an investor should get diversified. An investor should look out for every kind of investment vehicle, from bonds to property. According to experts, even if you’re gaining from a particular type of instrument, you should keep an eye on others. So that when they are at low prices, you can grab them conveniently.

Read – Tips to avoid investment fraud

Summing it up

According to experts, price is the most vital aspect of investment. Many digital wealth platforms offer low prices in the beginning, but eventually, the charge increases. So always look out for such investment schemes because it’s your hard-earned money that’s at stake.