In order to make your portfolio grow, your best bet is to place your money in stocks. But of course, you will need a good strategy for it to flourish, especially this coming 2016. One of these strategies is to slow down shelling out your money in equities and its funds. Why? It is because for the past 5 years, these funds have been up for at least 150% of their course and this coming year might be the time it runs its course. But despite of that fact, believe it or not, you could still invest your money here.
It would probably make you wonder why, especially when the risk could go high. Okay the truth is, even though the risk is high, it would still be worth it because this avenue has been proven effective by a lot of investors to still earn profit from it. This means, you won’t experience complete loss after all. For many years, investing in stocks has always been a good idea because it helps an investor’s money to grow.
It is always the goal of investors to see the economy flourish by having corporations profit from their business and having the sales of companies grow as well. Lately, companies and their profits were a result of cost cutting rather than sales profits going high. Corporations in the US don’t even want to go hire people anymore.
A solution to stimulate the economy is to have interest rates go low, as it will also help to have unemployment rates go down. In order for this to happen, purchasing debt securities that have longer terms should be done by the government. This is why investing in stocks is something that investors should be doing because the more stocks are invested on, the more the interest rates would go down.
The best move is to place your money in stocks knowing that your country would do something in having some new plans in the economy’s growth, which includes employment rates and increase in business sales. If you think that there’s a chance for a higher interest rates to come this coming 2016, I would suggest not putting in a lot of money for your investment, especially if you think that it would not be good for the economy.
Keep in mind that when the interest rate is high, this would have a huge affect in sales and it is not going to be in a good way. Profits in corporation would also be affected in a negative way when interest rates are high, as this would raise the cost for money lending. And in case you don’t know, corporations do a lot of that in a year.
To sum up the strategy I have for you this 2016, be careful and check first if the interest rates are high before you invest anything on any funds, bonds or stocks. Always do your research first before shelling out your savings. I’m not saying don’t invest at all, but be more cautious in investing.