The Reason why Everyone Loves DIY Investment Platforms

The allure to earn high returns from investment is often a temptation too hard to resist. We tell you to give in to the temptation, because the potential of great returns from investment is real. But, to make your best decisions, you need to enhance your knowledge about the DIY investment platforms. Don’t be overwhelmed by the sheer number of choices. Before you begin, let’s get our facts correct and understand some basics on investing.

What kind of investor are you?

There are some who would love to take an active role in managing their money’s growth. Others would set it and forget it. Know your type.

Fact 1:  Take note of the big picture

The basic of do it yourself investing begins with understanding your financial condition. Are you really in a position to invest? Is it wise to set apart a large chunk of money for investment now? Analyse your financial condition, examine your debt tax situation and debt obligations. Look at your insurance coverage and fund retirements accounts. And then you are ready to fly!

Fact 2: Set your expectations correct about the returns

Money doesn’t grow on trees, but it can grow with years of hard work and good insights. That being a far-fetched achievement, it’s better to be realistic about the returns. Even the best do it yourself investment ideas can take time to flourish. You can expect 9 to 10% return for ownership investments like real estate and stocks. A small business can give you high returns, but too many calculations are involved.

Fact 3: Time is money

Select your investments carefully. Matching the timeframe with your intent to invest is a must. A diy investment platform comparison is mandatory before you begin. If you want to use the money in the next 1 or 2 years, focus on safe investments. Market funds can be a good choice. For long-term investments, opt for a wealth-building portfolio.

Fact 4: Knowledge is power

Do your homework before making any fund or wealth investments. There may be a year when you have negative returns and, in a flurry, you decide to sell off your stocks and bonds. Take a step back and ask yourself: is this what you need to do? As a DIY investor, you need to find out the reasons behind the negative returns. Checking the performance of your investment is a must.

Every financial decision has some expenses involved. If you make a hasty decision of selling off your investments, that may attract capital gains tax and exit loads. You can always hit the sell button, but just think of paying the short-term and long-term capital gains tax. How is it helping you in the long run? Think hard, do some background research and then decide.

Fact 5: Are you only focusing on returns?

The DIY investment platforms have a lot to offer with high returns being one of the lucrative choices. But sadly, your mutual fund is losing money big time. And then there is another scheme which is promising a double-digit return. Don’t be hasty and run for the double-digit performer. Always remember, that no two financial products are the same. The investment criteria are different, so are the financial goals. Choose as per your need and not on the return promised.

Fact 6: Work out on your risk

A friend who works in finance has a straight financial advice for dummies. Before you work on your investments or choose the DIY investment platforms you need to work on your risk. To understand what’s going to work for you, chalk out your goals, risk between need for returns and capacity for loss, and the timeframes. No investment is without risk, but each one of us has different needs. Think about your short-term and long-terms goals and then decide on your investment portfolio.

Fact 7: Never put all your eggs in one basket

Yes, let’s reiterate that once more. If you want better returns, you just can’t put all your eggs in one single basket. We all agree that investments can be risky, but spreading your money means you will not be dependent on a single investment. If you incur loss in one, there might be other investments that can make up for those losses. It’s a good thing to diversify as it eliminates the overall risk in the portfolio while enabling growth at the same time.

Here are some tips while choosing the DIY investment platforms

• The learning curve can be steep for DIY investors. Mere knowledge about the financial products is not enough, both experience and perspective matter. In times of crisis such as now where we experience market volatility, you need to think and then act.
• Everyone can be a diy investor, but not everyone will succeed. It’s not rocket science, but things can be messy if you don’t keep a tab. You need to upgrade and update yourself to avoid a sticky situation where you can mess up your finances.
• Are you up for goal-based investing? You can neither predict nor beat market volatility occasionally and expect long-terms returns. What you need are solid investments and some backup plan when the market has tanked off.

Be wise, be prudent, and empower yourself before you take a leap for the best DIY investment platforms. You can do great in your DIY endeavours but taking timely course action in fund investments can always help.