Investment Strategies

There are so many different forms of investment strategies and a lot of them are personal preference but as far as just getting started there are a few tips and tricks you can use to get going.

Setting up an Automatic Investment

Setting up an automatic investment is a great way to get your feet wet. This allows you to allocate money to your preferred investment institution before you have the chance to spend it. A lot of people tend to see money in their account and will go spend it which trust me, it is very tempting to do so but it is more important to stay disciplined. But automatically investing you can pick an amount that you feel comfortable with whether that be $5, $100 or even $1,000 as long as you feel comfortable with that amount getting taken out of your account, you will be fine.

Open up a High Yield Savings Account

Opening up a high yield savings account is another fantastic way to start investing. There are many companies that offer these safe savings accounts such as CapitalOne and Sofi. These savings accounts give you protection as your money is not at risk but allow you to reap the benefits of earning more interest on your money. The only downside is these institutions do not have many branches if any at all so just be careful with that if you are someone who always needs cash and does not want to use ATMs. Putting your money directly into the stock market introduces you to the risk of losing it but also allows for higher returns. If that does not interest you, setting up a high yield savings account is far better than letting it sit in a low interest one. Something is better than nothing.

For the Riskier Individuals

As you journey on into investments and you want to get even riskier, you can start to explore calls and puts. A call basically gives you the right to buy a stock at a certain price. For example, if you really like stock XYZ and you do your research and think that it might go up to $500 by x date where right now it is only trading at $350, you can buy a call and if  that stock rises to that $500 mark, you have the right to buy it at that $350 mark and make some profit. However, if the stock goes down you will lose money rather than make it. You would want to do this if you are hoping the stock is bullish (going up). 

On the other hand, you can buy a put. A put is a position a bearish (thinks the price of a stock is going down) investor takes. Like the example above, if instead of thinking the price will rise to $500 you may have researched that the company fired their current CEO and hired a new one that the public is not very fond of so you think the price of the stock will fall to $200. You can then buy a put and now the owner has the right to sell that stock at the set price. These strategies impose a lot more risk so they are not recommended for someone starting out but as you do more research and feel more comfortable, they are great ways to earn even more money. More risk can be rewarded with more money.