If you’ve dabbled in investing in a minor way, and got a taste for what it can offer, then taking the step on to putting more money into the markets and taking bigger risks can be daunting.
Thankfully with the following tips at the forefront of your mind, it’s possible to move forward with more elaborate investment strategies without stumbling. Here’s how.
Hire a Financial Analyst (or Consider Becoming One)
Hiring a financial analyst is one of the best ways for investors who are serious about making bigger moves to do so with confidence.
A financial analyst will provide advice on market trends, taxation and other regulations related to large-scale investments. They can also help develop an investment plan that fits your goals and risk tolerance.
If you’re looking for more control over your own finances, consider becoming a certified financial analyst yourself. This can open doors in professional wealth management, as well as give you valuable insight into the world of investing. As part of this you’ll need to pass the CFA exam, which can be done with the help of the best prep course for the CPA and CFA tests available at crushthefinancialanalystexam.
Do Your Research and Develop an Investment Strategy
Before investing your hard-earned money, it is essential to do your research. Gather as much information as you can about the investment opportunities available to you, in order to make well-informed decisions.
Once you have gathered enough data and knowledge of the market trends and regulations related to large-scale investments, create an investment strategy tailored specifically towards meeting your goals, while minimizing risk exposure where possible, as we’ll discuss later.
Your goals can vary wildly. Perhaps you’re investing with a view to taking early retirement. Perhaps you’re aiming to quit your day job and become a full time trader. Whatever the end game might be, this has to be instrumental in shaping your strategy up top.
Analyze the Risks Involved
Every investment has its own set of inherent risks that could potentially impact your return on investment (ROI). You need to be aware of what these are before going all-in, and in fact you must be keenly aware that any investment has the potential to fail, and leave you with nothing to show for it, so you have to be calculated, realistic and unemotional in your decision-making.
Some common risk factors include market volatility, political or economic instability, fraud or scams, and liquidity issues.
To ensure a successful outcome with larger investments, be sure to do some research into how these potential risks can affect you before pulling the trigger. Once again, a financial analyst can help assess your situation and provide advice on which steps are best for limiting your exposure to the risks that are out there.
Take Advantage of Tax Benefits
As you move up to larger-scale investments, it’s important to understand the tax implications. Investing in stocks, bonds and other financial instruments can provide various tax benefits depending on your situation.
For instance, some countries allow investors to deduct certain amounts from their taxable income when selling securities at a profit, or reinvesting proceeds into new assets.
It is also possible that investing in certain types of qualified retirement accounts may reduce taxable income, as well as potentially qualify for special deductions and credits when the time to file your return arrives.
The Bottom Line
Either recruiting a certified financial analyst to handle your investments, or getting qualified in this field yourself, is the best way to play with the big boys without getting burned, so keep this in mind as you set out on the journey to wealth.
