Trending Trends

Are You Saving or Investing?

Two quick questions to make note of before reading further: 1. How old are you? 2. How much are you looking to put in the markets?

Based on your responses above, you might want to think about your money in the following ways – “If I lose this money today, can i make it back?”, “Is this money meant for a later purchase a few years down the line?”

We’ve often stressed on the importance of profiling yourself as an investor when you are getting started and revisiting the profile every few years. This sort of helps you make critical decisions about your money every now and then and helps you stay in better control of your financial destiny. 

1. If you are still young and have just started working (or will start working in some time) then you obviously have time on your side. Your choices could therefore be relatively risky if you don’t mind losing some of the money that your putting into the market right now. Frankly, since you are still young you have more time to see the market volatility evaporate and take short term risks so that you can actually stay invested long-term to see off a volatile period. While this helps learn more about the market, you also give yourself a chance to make outsized returns. This is an “invest-first” approach where you primarily want to make money using the money you already have.

You might find it interesting to look at stocks that are likely to make you money – start with looking at stocks you already know about or your friends have been investing in and move to discovering stocks that are likely to get a lot of market interest in the near term.

2. If you want to have a more cautious approach then you can think in terms a “save-first” approach. Here you want to make sure you constantly set aside some money for an important purpose that you want to fulfill later in life – an education or a purchase or an exotic trip .. whatever floats your boat! To do this best, you might want to start by investing in bonds, mutual funds and some ETFs. There are a few instruments around that help you keep your capital protected. Start there. This is like putting money in a piggy bank. Apps like Acorns may also be useful in helping you do this.

Whatever method you choose, you can always diversify a little bit from one side to the other. If you’re making by and large risky investments, get into some ETFs to put some money at relative safety. If you are only saving, it may not be a bad idea to set some money aside for safer (long-term) stocks like AAPL, GOOG, AMZN and some ETFs and index funds. 

Whatever your investments, you can bring your portfolios into Stockal to track your investments and make better decisions with personalized intelligence and investing signals. Try it here!

Leave a Reply

Your email address will not be published. Required fields are marked *