Times have changed. One cannot invest and forget. Days of buy and hold strategy are gone. Investors need to continuously evaluate their investments in order to preserve and protect any diminution in their assets. Here are a few strategies that one can consider following;
Reevaluating Home Mortgages
Most important considerations here are to continue to live and payoff your mortgage, to sell, to refinance and to lock off a mortgage at a fixed rate. With real estate, one can continue to live in a house and pay off the mortgage. This can be an effective retirement nest. Then at the time of retirement this can be sold and the proceeds used to finance retirement while living in a less expensive house.
The other strategy can be to sell a house if its value has gone up. The excess proceeds so received can be invested as part of retirement income.
Refinancing is one of the most important strategies in real estate investing. One can always refinance and generate extra cash. In the present turmoil with low mortgage rates, one can seriously consider a fixed rate mortgage for at least 15 years if one intends to keep the house for a long time. This could be an effective strategy to boost funds at the time of retirement.
Investors need to constantly adjust their portfolios. This should consist of fixed investments, stocks, bonds, long term and short term investments, domestic and global investments etc. Then one should balance a portfolio within the sectors as well.
The need of the times is that one should take charge of one's investments and not to leave them to the whims and fancies of financial advisors, more so those which are commission based.
Exchange Traded Funds (ETFs)
This has emerged as a lucrative investment option. These are cheap in the category of mutual funds. Many of them can be obtained at a fraction of the management cost. They are quite diversified now in areas like gold, energy and other precious resources. One should provide serious consideration to this vehicle of investment.
Fee Based Advisors
Commission based advisors are supposed to make money with every transaction and every recommendation. One should be wary of them. They could be very expensive. If one prefers to hire advisors as against self directed investment, one might be better off with fee based advisors only. However if one has the time and the desire to learn, nothing can be better than managing one's investments by oneself.
Don't Lose Money
It is better to be safe than sorry. The first rule of every investment should be not to lose money. One should always be cautious from investments that one cannot understand and which are risky.
Diversifying into mutual funds and bonds could be an effective option. This also means that one should have unrelated assets in one's portfolio like domestic stocks, foreign stocks, precious metals, real estate, timber, inverse funds, energy funds and bonds. This will reduce overall risk.
Never spend more than your income. Overspending and not having a cap on this is a sure way to disaster. Nothing can be overemphasized than this principle. Simply put, one should never live beyond one's means. Also adhere to the principle of pay yourself first.
The author has background in business, economics and finance. He is presently researching in finding ways to make money and working on the following website and blogs: