The 5 New Year Investing Resolutions You Need to Make


New Year’s Day is right around the corner and there are a few investing resolutions you need to make for 2016. The markets have shown that the world’s economy is closely tied together, even more so than ever before, and that sure investment choices (oil) can quickly turn into a bad investment.

1.     Diversify Your Investments

The one recommendation that I have year after year is to diversify as much as possible. You don’t want to go for quantity as much as you want to go for variety. Investing 100% of your portfolio in stocks only is a bad idea, so invest in one of the five major asset categories:

  • Stocks
  • Bonds
  • Real estate
  • Cash
  • International investments

A hypothetical breakdown would be 75% stocks (25% international), 15% in bonds and the remainder in real estate. This will help you balance your risks moving forward, and is a smart choice for investors.

2.     Invest Money You Won’t Need for Five Years

Short-term investments have much higher risk, and you want to be investing for the long term. When it comes to the markets, 2015 has shown that market volatility for the short-term investor can lead to dramatic losses.

With the Chinese economy slowing and uncertainty in the European Union, short-term investors have find that they lost the majority of their assets. Long-term investors use fluctuations as opportunities, but the long-term investor realizes that their investments are money that they won’t need for at least five years.

Don’t invest money that you cannot afford to keep in the markets for at least five years.

3.     Maximize Retirement Benefits

Maximizing retirement benefits is highly recommended because many employers will match your contribution up to a certain point. While it would be great to maximize your contributions, it is not possible for every household to afford this type of investment.

If you can afford to maximize your contributions, ensure that you reach the maximum contribution that is matched by your employer.

4.     Invest Holiday Bonus

A holiday bonus is something that everyone looks forward to, but it is money that you can live without in most cases. Instead of using your holiday bonus to purchase a few additional gifts for your kids, use this money for investments.

Even if you use just 10% of your bonus, this will allow you to grow your money rather than give it all way to the world’s biggest retail stores.

If you are ready investing a lot of money in the markets, utilize your holiday bonus for an emergency fund. This year, make the resolution to utilize your holiday bonus to its maximum potential. An emergency fund will help your family if you lose your job, or the money can be used to pay off debt.

5.     Keep on Investing

There are a lot of variables going into 2016 that indicate the markets will remain volatile at least for Q1. While many investors pull their money out of the markets as soon as they start falling, the smart investor will use the lower price of stock as an opportunity to build their investment portfolio.

In 2016, made the commitment to continually invest in the market no matter how bad the market looks.

If oil prices continue to fall, it may not be a good idea to invest in energy companies. But, this does not mean that you cannot invest in healthcare companies that continually grow or financial institutions. There is always a good investment available, but you may need to dig deeper in 2016 to find it.


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