We make investments in order to get good returns on our money. But we often feel disappointed by how our investments fare. A lot of the times, this is because we do not invest in a structured way and don’t even monitor returns regularly from our investments. Here I will discuss some practical ways with which you can maximize the gains on your investments.
Save and invest
Saving money is a good idea. You can spend a little bit less and invest a little bit more. This can significantly increase your investment returns over the years. If you think that it is difficult to save more than what you are already saving, think again. All you need to do is to plan your expenses carefully and make sure that you do not spend more than what you planned for. For example, you can save money by simply remembering to switch off the lights every time you walk outside the room.
This can save you a reasonable sum on your energy bill. You can eat out a little less and put the savings separate for investment. The less you spend the more money you will have to invest and get returns from. Small savings from a number of different sources combined together can make for a reasonable sum for investment.
Keep your investment portfolio diverse
You need to make sure that you keep your investment portfolio varied. For example, do not only invest in stocks. Vary the level of risk by putting some of your money in a savings account or a CD, which are very low risk and gives a small but steady income.
While it is a good idea to keep your money safe, to grow it, you will have to invest some of it in risky ventures as well. The gains are usually proportionate to the risk. So a good investment strategy is not to avoid risk altogether but to take calculated risks and divide your investments in such a way that you have both risky and safe investments.
Monitor your return on investment
You should constantly monitor your return on investment on individual investments. It will tell you which investments are not paying off well and whether you need to move away from them. The tracking of investments is very important as very often, people forget to do just this and keep piling losses on bad investments.