New Investment Strategies for The New Year

Good Morning Green Panda Friends and Happy New Year.  Today is January 2^nd, it’s our first post of the New Year, and it’s also the first post in our new series titled “Investing: The Ins and Outs of Dividends”  This series will continue through until the end of January and it will discuss everything to do with investing in dividends from the many benefits to the various risks involved.  I hope you like our new series and if there is ever a topic that you would like us to cover on Green Panda please contact us by Email or on Twitter.

Today we are discussing Investment Basics.  We are going to go over some informative tips to help you get started investing.  Very often people don’t invest because they are afraid; the reason that we are afraid of something may be because we don’t fully understand it.  Green Panda is here to help you understand your basic investment options as well as basic investment strategies.

Smart Investment Options

Whenever we are starting to invest (or do anything in general) we should always begin by researching our options. Before we can choose the best investment strategies for our personal financial goals we have to first learn about the different investment options that are available to us.

We can choose from a variety of different ways to invest. The best option for us depends on our own personal financial goals.  Once we have a financial goal we will know the time horizon in which we want to invest as well as how much risk we are willing to take in order to earn a potential rate of return.

We can choose to invest with our bank.  The great thing about investing with our bank is that we most likely already have a relationship with a personal banker.  We can go into our bank branch at any time and ask questions or get help with our investing.

We can choose to invest with a discount broker.  We definitely have more investment options when we chose to open an investment account with a discount broker.  We can directly purchase Mutual Funds, ETFs, Stocks, and Currencies through our Discount Broker Account.  The downside is that there are fees involved to maintain the account as well as transact in the account.

We can choose to save money in a bank account and not invest at all. If we are not yet ready to invest in the Stock Market then we can put our money into a High Interest Savings Account which allows us to have access to our money at any time while earning a higher interest rate than a regular checking account.

 

Helpful Investment Strategies

– Investing for a specific short term goal.  A short term goal is a personal goal that you hope to achieve within 2 years.  Money saved for a short term goal should be invested in cash or cash like investments such as Term Deposits or Money Market Mutual Funds.

– Investing for a rainy day. An emergency fund is a medium term investment. We may not need the money any time soon, but we will eventually use the money for something. Want to make sure that we earn interest on our investments until that day comes.  Fixed Income Investments such as Bond Mutual Funds or Mortgage Backed Securities are a good medium term investment.

– Investing for Retirement.  This is our long term investment. We can afford to take the most risk on investments in our retirement account because we have the longest time horizon.  If we lose money on our investments in the next 5 years it’s ok because we have another 30 years until retirement. Try investing in Foreign Currencies or Equity Mutual Funds in your retirement account to potentially maximize your rate of return over the long term.

What are you investing for?

Photo by Azureon2