Entrepreneurs like Nicholas Kyriacopoulos know the importance of how to invest during uncertain times, and it would be fair to say that the last year or so has had a few surprises for everyone following investment markets. While this change and volatility can be very profitable for those who make the right decisions, it also makes those right decisions harder to discern.
The fundamentals of good investment have not changed, however, and will continue to help investors in the future:
Keep it simple
Keeping it simple is a good rule for many areas in life, and investment is definitely one of them.
How much time do you really want to spend managing your investment portfolio, and what kind of returns would make that commitment worth it to you?
If your investment portfolio takes careful attention and management to work, you need to be prepared to give it the time it needs. Keeping a simpler portfolio that doesn’t need as much attention paid to it can be a better option for people who have limited time to spend on their investment decisions.
That doesn’t mean you should necessarily take a ‘set it and forget it’ approach to investment, but absolutely consider the additional time commitment and stress of each potential investment and whether it is worth your time.
Diversify
Diversification improves reliability and reduces the risk of just about every investment portfolio. Your investments should always be varied enough that even when a few of your investments are in a slump, you will still have enough winners to make a minimum return.
Many entrepreneurs like Nicholas Kyriacopoulos from Toronto recommend holding a variety of asset types as well as stocks. For example, consider bonds and real estate as part of your overall portfolio; make sure you have stocks associated with several different industries.
Rebalance
According to Nicholas Kyriacopoulos, be open to the concept of rebalancing. As market conditions changes, look to shift your portfolio away from investments that with less promising prospects and up your investments in markets that look ready to rise.
Nicholas Kyriacopoulos gives a simple example of rebalancing from the latter half of 2020. While oil prices were not looking great for most of the year, there were signs of incoming change. As a result, some investors sold oil assets over the summer and later purchase oil stocks. They then saw great returns when the stocks surged in November.
Asset allocation
As an experienced investor in Toronto, Nicholas Kyriacopoulos advises careful consideration of your current situation and future financial goals. For the most part, this is about the amount of risk you can take on and your ability to recover if an investment doesn’t go your way.
If you still have decades left to work and rebuild, you can afford to take more risks than if you are approaching retirement and are looking for holdings you can rely on for a long time.
Consider your long-term goals
Nicholas Kyriacopoulos observes that besides your current situation, you also need to think about long-term goals. Where do you want to be in five, ten, or twenty years, and what can you do along the way to ensure your investment takes you in the right direction? Setting goals and having plans is just as important in 2021 as it has always been.
Don’t ignore your instincts
As Nicholas Kyriacopoulos, investing does involve risk and it sometimes means going with what you feel deep in your gut. While your decisions should always be backed by data and analysis of the market, following your instincts make it easier to have confidence in your decisions.
Your instincts can come about as a result of noticing minor details others are not noticing. If the feeling is strong enough, take the risk.
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