How to Build a Viable Investment Portfolio

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The failure to save represents a significant issue across the globe, and one that could cause huge problems for the next generation of retirees. In fact, an estimated one-in-four Americans have no emergency savings in the current climate, with this rate having fallen incrementally over time.

With this in mind, there’s a growing onus on each individual to ensure that they take control of their savings and take proactive steps towards safeguarding their financial futures.

In this article, we’ll look at how this can be achieved and offer a brief insight into how you can build a viable investment portfolio.

Get Actionable Advice from Reputable Resources

No matter what time of life that you choose to invest, you may need a little help building your portfolio and realising your unique investment goals.

While this information can be sourced by interacting with financial advisers, you’ll need to pay for this and it may prove beyond your means.

However, news websites and feeds are also excellent sources of real-time data, which can be used to prompt informed decision making. Similarly, you can access investing reviews, strategies, tips and more through a number of independent websites online, helping you to borrow from the principles of social trading and implement proven strategies.

If you sign up to an online trading platform, you can also use advanced analytical tools to identify key trends, with this information delivered succinctly and in a way that you can fully understand.

Understand the Near-term and Real-time Economic Climate

Successful investment often involves you dipping your toes into the world’s financial markets, but this endeavour requires a significant level of knowledge and understanding.

This must extend beyond individual markets and asset classes, however, as these entities are heavily influenced by the wider macroeconomic climate.

With this in mind, you’ll need to understand the impact of the macroeconomic climate, which details the behaviour of the aggregate economy and the relationship between individual factors such as inflation, interest rates and the national income.

Make no mistake; the macroeconomy has a direct impact on the markets, particularly those trading volatile derivatives such as currency. As a result, it will bear heavily on your short and long-term investment strategies, so a clear understanding can help you to achieve the best possible returns.

Make Diversification your Watchword

As a novice investor or someone who is trying to build an investment portfolio later in life, diversification will be absolutely central to everything that you do.

In simple terms, this allows you to distribute your wealth across a number of different and strategically selected assets, spreading your risk in the process. This also allows you to strike the ideal balance between risk and reward, as you combine volatile assets that deliver margin-based returns with secure stores of wealth like gold.

This should contribute to a portfolio that can generate returns even in a depreciating economy, particularly as the value of gold tends to increase during times of austerity.

Similarly, speculative investment methods allow you to hedge against certain derivatives, helping you to profit directly from downward market movements.

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