Investing Concepts
Investing intelligently may at first seem a daunting task. But by focusing on a few key investment principles, even the newest investor can maximize the total returns on their portfolio.
Some of these principles include:
Safety: When an opportunity sounds too good to be true, it probably is. Accordingly, all investments must be made via well-known and established companies in OECD “white list” countries. And the local government must offer substantial government backed guarantees on investments. Without basic assurances that your money will be treated appropriately, there is no reason invest anywhere.
Diversification: For most, it is best to use diversified investment vehicles such as mutual funds, index funds, ETFs, hedge funds, REITs, etc. By diversifying properly investors avoid exposure to risk factors affecting individual investments.
Asset Allocation: Maximize portfolio returns by investing across multiple asset classes. These include equities (stocks), bonds, real estate, commodities, and alternative investments. Proper asset allocation is an easy way to control the risk in your portfolio, while maximizing returns across different types of market conditions.
Think Globally: Global markets are complex and intertwined together. But not all markets move in the same direction at the same time. For example, a large move in the US stock indexes might have little near term impact on the price of Eastern European property. By investing in areas that have limited correlation to each other investors can further reduce risk, and take advantage of rising markets.
Liability Protection: Losing a substantial amount of savings is something no one should have to endure. Investors should always structure their investments to provide maximum protection from people, systems, or events that are beyond their control.
Tax Planning: Taxes can be the biggest drain on the performance of any portfolio. Investors should protect themselves by utilizing tax structures that reduce or eliminate taxable events.
If you would like more information about a solution perfect for you, register using the form on the top left of the page. Objective Trading is happy to work with investors of all sizes and circumstances. Our clients range from twenty year old new investors with a small amount of money each month; to large multi-national corporations with millions to invest. Consultations are free of charge.
