Many of us who don’t have a lot of money or a deep understanding of investing might find it pretty boring. Even so, we get how important it is to invest for a comfortable retirement, unlike many Americans who don’t have savings or investments. Most financial advisors recommend a simple method called ‘set-it-and-forget-it,’ which is perfect for beginners like us. While it may not be exciting, it’s really important and beneficial. From my own experience, finding joy in the process can actually help improve your investments. Let me share a few strategies that have made my self-directed IRA investments both profitable and enjoyable.
Long-Term ETFs and Mutual Funds: This is the key method I mentioned earlier. These funds generally grow along with the national stock market. The fund manager picks a variety of stocks, and you get returns based on their growth. Since the market tends to go up more often than down, strong-performing stocks offset the weaker ones. So, by spreading your investment across many stocks, there’s a good chance you’ll see your money grow. The big advantage here is you don’t have to guess which individual stocks will do well. The strong ones in your portfolio will help keep your overall balance growing over time. I highly recommend making these a big part of your investment portfolio. ETFs are even more cost-effective since they work like mutual funds but trade like stocks, saving you a little time and money when you buy them. This strategy can lead to big gains, though it usually takes decades, but it’s almost guaranteed to pay off, which can make the investment journey enjoyable. So, think about putting your money in these funds before trying other options.
Day Trading/Spread Bets: If you love a bit of excitement, this might be more up your alley. For those open to taking more risks, several platforms let you speculate on the value trends of different financial and non-financial items. This is often recommended as an alternative investment strategy. However, it’s wise not to put most of your money into this high-risk method. Limit these bets to no more than 10% of your total portfolio. While the risk is high, so are the potential rewards, and you might find a lot of excitement and skill improvement in this type of investment. Many people get the hang of it over time and start making significant gains, but there’s always a chance you could lose your initial investment. Make sure to learn the system and understand the risks before you start. Over time, you’ll figure out the best way to allocate your investments for your needs.