April 23, 2024

Investment Management: How Do I Grow My Portfolio?

investment management in Orlando

The major benefit of investing is that you can grow it over time if it’s invested properly. There is no one right way to grow a portfolio, however. Each individual investor needs to consider how much they can invest into the portfolio, how much time they have in which to grow it, and their risk tolerance before deciding on an investment management strategy. Some of the following strategies are commonly practiced because many people have used them to successfully grow their portfolio.

Diversify Your Portfolio

It’s a good idea to not put all of your portfolio’s eggs in one investment basket. Stocks aren’t the only type of investment. You can invest in bonds and other types of assets as well as stocks. This can help to eliminate some of the risk that is inherent in investing. How this works is that in a diversified portfolio, not all types of investments are up or down at the same time. If stocks are down, bonds should be up, which keeps the portfolio balanced. Knowing that if one investment is down that another will be up can help investors feel more comfortable with taking higher risks in investing.

Practice Dollar-Cost Averaging

Dollar-cost averaging, or DCA, is the practice of spreading out investment purchases so that you can take advantage of lower prices that occur periodically. The prices on any type of fund will vary from one period to another and by spreading out the purchases, you ensure that overall you pay less than you might if you made a larger lump purchase. This investment strategy is often used with mutual funds.

Diversify Your Portfolio

Time the Market

If you have the time and energy to consistently monitor the markets, you can keep an eye out for when certain investments are at a lower cost. If you watch the markets over a longer period of time, you can look for patterns that may occur so that you can make purchases when costs are at their lowest.

Buy Investments and Hold Them

Another strategy is to buy and hold investments. This means purchasing investments and then holding onto them for a long period of time. This investment strategy is particularly beneficial for people who don’t want to have to monitor the markets or their investments all the time. The intention is the hold these investments over the long term and so therefore short-term market fluctuations aren’t necessarily a major concern for investors using this strategy.

Consult a Financial Advisor

Perhaps the single best strategy for someone looking to grow their portfolio is to consult with a financial advisor who can manage investments. Professional investment management in Orlando can help you to maximize your portfolio’s growth. If you work with an investment manager both for advice and also to manage your portfolio for you, the manager can follow the investment strategies that will work best for you and your portfolio. If it’s necessary to monitor the markets, a professional has the knowledge and experience to recognize when prices will be lower and can take advantage of that to your benefit.