A good investment plan is the key to financial freedom. Making a personal financial plan is a great first step to take if you want to have enough resources to enjoy your retirement. When considering what to invest in, it’s important to take note of the obstacles that can stand between you and a comfortable retirement: inflation, taxes and fees. It’s also important to invest in companies that you understand: the principle of buying what you know and knowing what you buy.
If you’re wondering what to invest in, it’s important to own gold, because it has a store of value and it can be used as a hedge against inflation. You can invest by purchasing shares in a gold mining company. Register with a stockbroker who will recommend mines whose stock you should purchase. Alternatively, you can open a gold investing account, which is similar to a stock trading account. You can also purchase gold coins and/or gold bars.
Mutual funds are also great for people looking for what to invest in, once you’re prepared to work with a plan. If you need to keep your assets safe and liquid you should invest in money market funds. Bond funds rise and fall in value, but they will pay you higher interest rates. They carry moderate risk. A global equity fund will give you exposure to stocks worldwide, and a large-cap fund featuring diversified equity income will invest your funds in major US companies. Complete your investment package by putting your money in a real estate fund specialising in managing diversified real estate portfolios.
In spite of the potential for great returns, be warned if you choose to invest in mutual funds, investment trusts and unit trusts rather than managing your own stock investments: you may be damaging your investment returns on your life savings. You see, whether you realise it or not, the fund managers that you are trusting to handle your investments on your behalf may be stinging you for a complicated assortment of fees.
It’s also a good thing to think outside of the box and invest in offbeat items such as wine. The Wine Spectator Auction Index is at an all-time high and profits can be abundant if you know what to invest in. However, you shouldn’t jump in unless you’re knowledgeable about wine. Remember, buy what you know and know what you buy. However, you need to be aware that there are new markets driving wine prices up, so it’s worth taking a look at.
Any investor who was prepared to stick his or her neck out following the Great Recession and frightening credit crisis of 2008 was greatly rewarded in 2009 and 2010 for putting money in foreign stock, particularly up-and-coming markets such as India, China and Brazil. If you choose to go with foreign stock, you can do it through a mutual fund (try to get one with low fees), or you can do it through a diverse index fund or an exchange traded fund.