Some investors already have a solid plan for 2019. If, however, like many people, life events such as family obligations, a career change, health concerns, or a move have pushed the development of a basic financial strategy to the bottom of your to-do list, fear not!
Your “failure” to accomplish any financial planning for the coming year, may even work in your favor. This is particularly true if you are a generally financially well-organized, savvy person. Taking time away from your typical routine can provide a fresh perspective and open your mind to ideas that weren’t previously even on your radar.
So, consider 2019 to be an opportunity for personal development, financial creativity, and innovation as you forge ahead toward your goals.
In the meantime, check out these 5 keys to invest success in 2019 that will help drive you down the path to a successful financial 2019 and beyond.
- Near-Term Budgeting Goals
Whether this means setting a realistic budget and sticking to it, paying off debt, or finally joining the real estate market in a meaningful way, it is important for your financial health to make short- term changes. If you are in your 30s, 40s, or beyond, eating out one less time per week probably will not affect your ability to pay your third of the rent like it did in your 20s. However, an awareness of your spending money’s whereabouts is a vital skill that can be continuously honed. Whether you want an extra $300 monthly for your 401k, or you just want to know where your miscellaneous fund is going every month, knowledge is power. New budgeting tools are constantly being developed, and the one you have been using for the past decade is almost certainly outdated. Evaluate your needs and try out a few new options.
- Financial Technology: APIs
Speaking of new options, a lot has changed for banking tools even over the past year. Many banking organizations have altered their data sharing policies to enable third-party collaboration in compliance with regulatory bodies. This has enabled the development of some truly excellent secure ecosystems for payments, account management, and value optimization for consumers. Reach out to your bank or credit union to learn about any new tools available to manage your accounts and investments.
- Meat and Potatoes: Diversify
Yes, you have heard it many times before. But the art of diversifying is something that can never be stressed enough. In finance, monogamy is not a virtue. It is perfectly alright to have personal preferences in the form of a “favorite” investment. However, long-term, finding a one true investment love will cause nothing but hurt – for you and the investment.If your entire portfolio consists of stocks and commodities, try index or bond funds, or even cryptocurrency. Keeping a watchful eye on a wider variety of markets not only provides long-term protection from volatility, but it also gives you time to react before any real damage is done. Also, consider industries you know are experiencing immense growth. Several areas of healthcare, including elder care, rehabilitation, and long-term care facilities, and medicinal cannabis are all exploding. This is projected to continue. Find something new that interests you and invest in it.
- Reconsider Commodities
Commodities are a traditionally hated investment, and 2018 did nothing to change that view. However, interest rates are rising, and the inverse correlation between stocks and bonds and the gold market means that 2019 could be a strong year for gold. Other precious metals are also predicted to see gains, with issues such as international trade issues, Brexit, increased capital spending, and other factors playing into potentially positive changes. The volatility of commodities means it is critical to keep a close eye on the numbers throughout the year. Weather affects grains; seasons change energy commodities, war affects everything. With multiple factors in play, an added benefit is that commodities are also an excellent educational tool for investors.
- Grouped Funds
Basket-type funds like exchange-traded funds, or ETFs and real estate investment trusts, or REITs (basically the real estate version of an ETF) are a growing tool to diversify automatically. ETFs track an index and contain multiple holdings, sort of like a mutual fund. They are available like stocks on an exchange. ETFs have seen steady growth over the past year, which is projected to continue. Like ETFs, REITs are liquid, transparent, and don’t correlate with stocks and bonds. While they do see low growth, it is steady and moderately correlated to the rental market, which is projected to increase in urban areas over the next few years.
Get Out and Invest
In conclusion, 2019 is an exciting time to be investing, to try new ideas, and to educate yourself within new markets. Armed with these 5 keys to investing success, you are sure to see great personal financial progress on multiple levels in the coming year!