Investing is an essential component of growing your wealth, but knowing what to invest in and how to create the appropriate strategy can get tricky — especially during a volatile market.
To help get some clarity, GOBankingRates asked our Top Money Experts for their best tips for investing in 2023 — here’s what they had to say.
Focus on the Long-Term, Diversify and Stay on Top of Trends
Andrew Aziz, proprietary fund manager at Peak Capital Trading and author of “How To Day Trade for a Living,” said it’s important to focus more on the big picture rather than the day-to-day swings.
“Maintain a long-term perspective when it comes to investing,” he said. “This means resisting the urge to make impulsive decisions based on short-term market fluctuations or news events, and instead, stay focused on your long-term financial goals.”
Aziz also emphasized the importance of diversification.
“By spreading your investments across different asset classes, sectors and regions, you can help manage risk and potentially earn more stable returns over time,” he said.
Finally, Aziz noted that the best investors stay informed about what’s going on in the markets and the economy at large.
“It’s important to stay up-to-date on the latest trends and developments in the financial markets,” Aziz said. “For example, emerging technologies such as artificial intelligence and 5G may present new investment opportunities in the coming years. Similarly, keeping an eye on geopolitical developments, such as trade negotiations or regulatory changes, can help you anticipate potential risks and opportunities.”
Invest in Mutual Funds
Dave Ramsey, author of “The Total Money Makeover,” said that mutual funds are his preferred investment vehicle.
“Mutual funds are the way to go,” he said. “They cast a wide net across many companies, helping you avoid the risks that come with the trendy stuff, like crypto.”
Invest in Large Companies
Chris Hill, host of the “Motley Fool Money” podcast, said that his best advice for investing in 2023 is to “go big.”
“Invest in large, profitable companies,” he said. “2023 is proving to be a better environment for big businesses than smaller ones. If you don’t already own shares of companies with a market cap over $100 billion, this would be a good time to start.”
Invest in Alternative Assets
In addition to investing in large companies, Danetha Doe, founder of the personal finance blog Money & Mimosas, recommends adding alternative assets to your portfolio.
“I believe investors should focus on alternative investments to diversify their portfolios in 2023,” she said. “This can be equity crowdfunding, international stocks or other opportunities.”
Avoid Investments You Don’t Understand
You may be tempted to invest in something because it’s buzzy and other people are doing it, but if you don’t understand exactly what you’d be putting your money into, it’s best to step away.
“It’s important to avoid investments that you are not familiar with or that have a very limited track record or history of proven concepts,” said Jully-Alma Taveras, founder of the Investing Latina blog and YouTube channel. “Although it’s important to take risks, make sure that you know enough about an industry or category before investing into it.”
Learn the Rules Before You Break Them
If you’re new to investing, it’s important to master the basics before taking big risks, said personal finance YouTuber Andrei Jikh.
“Investing has rules, and the rules are simple — [start by] buying low-cost broad market index funds,” he said. “Once you know the rules, then you can start breaking them. Unfortunately, most people start the other way around.”
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