Final savings cannot be invested in investments. Before you start playing on the stock market, you need to make sure that you have a financial airbag of 2-3 salaries per month. This was told to socialbites.ca by the investment strategist of BCS World of Investments. He outlined the five rules of investing.
“The first rule is to have the financial cushion. The specialist noted that during possible force majeure he will allow the quality of life not to decrease, and it is better to keep it “at hand” in cash, as deposits.
The second rule is to determine the purpose of investments, which will make the investment process more conscious. The target must have a target date. Example: Buying a plot within three years. The composition of the instruments in the investor’s portfolio will depend on the purpose, maturity, amount of the initial investments, as well as the main investment currency and risk profile (attitude to individual risk). For example, if the goal is long-term, saving for a future pension, for example, stocks will clearly dominate the portfolio as the best creators of long-term profitability.
The third rule is to invest regularly. Investments love discipline and a systematic approach. Therefore, it is best to immediately decide how much you can allocate to investments each month, for example, 10-20% of income.
The fourth “pillar” of effective investment is diversification. It is important not only to distribute investments according to asset types (stocks, bonds, deposits, mutual funds, etc.), but also according to the currency principle.
“For those who generally earn and spend in rubles, the optimal share of savings in foreign currency and foreign currency instruments will be 30-40%. This approach allows for minimizing losses from exchange rate volatility,” said Bakhtin.
The fifth rule is not to neglect the support of professionals. Financial advisors will identify the risk profile and help you come up with a personal financial plan – a “roadmap” of your movement towards your financial goal, as the investment strategist outlines.
According to the Moscow Stock Exchange, the assets of Russians in brokerage accounts rose to 8 trillion rubles in April-June 2023; this is 14% more than in the first quarter.
I was investing without strategy before compared by gambling in the casino.