There are a lot of decisions that you need to make when you begin growing your wealth portfolio. You need to think about the kind of assets that you feel more comfortable spending your money on. It’s also important to consider what kind of risk you’re comfortable exposing yourself to, and how much of a budget you can put towards building your plan. One of the biggest decisions you’ll need to make is also one that people frequently forget to talk about – deadlines. Once you have an idea of the kind of assets you want to work with, and how much money you want to spend, you’ll need to determine a goal and figure out what kind of results you’re working towards. This will help you to choose trading platforms for either long-term, or short-term growth.
When is Short-Term Investing a Good Idea?
Setting a deadline for your financial portfolio doesn’t mean picking a specific date when you need to have made a certain amount of money. You can’t predict what the future will bring. Instead, it’s about deciding whether you’re going into these positions short-term, or long-term. If you know that you’re going to need to start making money fast, then short-term will usually be the best way to go. Otherwise known as growth spending, short-term strategies involve placing your cash in the market, and making decisions quickly.
Often, you’ll find yourself exploring opportunities that have high liquidity, but a lot of volatility too. Because you’re making bigger decisions faster, you could end up losing cash, as well as gaining it. For short-term growth, start by looking into day trading strategies in an industry that you feel comfortable with. For some people, this will mean exploring things like forex and stock trading. On the other hand, you could think about flipping real-estate, or peer-to-peer lending.
When is a Long-Term Option Better?
Most people will want to get their hands on some extra cash as quickly as possible. This can make it harder to see the lure of a long-term strategy that takes years to pay off. However, buy-and-hold plans can actually be very lucrative in the right circumstances. Rather than constantly moving in and out of positions, you’ll need to buy something and hold onto it for a while, until it’s worth more. The biggest downside of this method is that you need plenty of patience, and you don’t have as much control. This can be very frustrating for people who want to see the benefits of their investment fast.
On the other hand, you also get the advantage of taking on less risk for your portfolio. Holding onto assets for a longer period of time means that you don’t have to worry as much if there’s a sudden dip in the market. If you’re looking for a wealth-building strategy that’s less active and stressful, taking the long-term approach will remove a lot of the panic from your routine. However, don’t expect to see any massive changes in your accounts overnight.