Connect with us

Investment

If fun investing is stressing you out, it is time to exit – Mint

Published

 on


A raging bull market and low interest rates have got people to get creative with their money. I often hear animated discussions about international investing in NFT, P2P, invoice discounting, fractional real estate, covered bonds, crypto, etc. As long as you are aware of the risks associated, and allocations for core goals are done properly, you can bet some money on new, happening products. Here is what you need to keep in mind with these fun investments.

Ask yourself why you want to make these investments. Is it for fun, or out of curiosity, or because everybody is doing it, or FOMO (fear of missing out), or TINA (there is no alternative)? Of course, you can only do these investments if you are saving sufficiently for financial goals and have financial security. Unfortunately, I see investors who haven’t even paid off loans, or started saving for goals, allocating capital to fun investments.

Invest only in regulated products: Cryptocurrency, or invoice discounting is not regulated. Regulation ensures some risk mitigation such as an independent oversight and grievance redressal for investors. Check the pedigree and experience of the manufacturer. Evaluate their privacy policy and processes such as whether the funds are held in a pool account.

Do not invest for instant gratification: Claims of quick wealth from these instruments, made on social media, show only one side of the journey. Seldom does one see videos from influencers when there is a downward trend.

Limit these investments to 5% of the portfolio and be ready to lose the capital. Ring fence it from the rest of the portfolio so that losses do not affect your financial goals. While trending markets may make you feel you know it all, these are high-risk investments.

Having got into it, follow the right information sources. Study the product and understand its workings. Do not rely on social media influencers. Many influencers have called covered bonds like fixed deposits with better returns but not spoken about the downside. Read up regularly to keep yourself informed and do not take reactive decisions based on what friends or colleagues are saying. Unless you research, you will not succeed.

Make rules for yourself: For example, have an automated trigger stop loss or profit booking level. This is to avoid getting skewed to one product and to take emotions out of the investment. Try out the product with a small amount before committing more capital. You may not really need to diversify in fun investments. In fact, having too many such products may be more harmful since they are open to vagaries of the system.

I find investors love tools and simulators or gamified content. These can supplement your plan, but it is your emotions which have a bigger impact on returns. Sometimes, to prove that an investment works, investors hesitate from taking action even when there are enough warning signs. Or after early success, one may invest more money. Rebalancing at regular intervals is equally important with fun investing.

Timing the exit: Fun investments need to be monitored regularly and probably more often than regular investments. Exit calls, too, need to be taken swiftly based on market movements. Beware of costs and taxes. Most fun investments have high built-in costs, which investors cannot decipher. In direct investment into international stocks, the costs are between 3% and 5% and the tax compliance increases manifold, and is cumbersome. With stocks/ETFs baskets, there is tax to be paid on each rebalance, thus increasing the costs.

If you find fun investing is stressing you out, you need to exit. If you cannot keep up with the volatility like was seen in the case of bitcoin or you hear some negative news about the platform, exit immediately.

Do you want to allocate precious time for this? Or would you prefer to use your time is a more meaningful way. Thankfully, the Buffett or the Bogle styles are not passé and you can decide to stick to simple investing and high thinking.

Mrin Agarwal is founder director, Finsafe India.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!

Adblock test (Why?)



Source link

Continue Reading

Investment

Bitcoin hovers near 6-month high on ETF hopes, inflation worries

Published

 on

Bitcoin hovered near a six-month high early on Monday on hopes that U.S. regulators would soon allow cryptocurrency exchange-traded funds (ETF) to trade, while global inflation worries also provided some support.

Bitcoin last stood at $62,359, near Friday’s six-month high of $62,944 and not far from its all-time high of $64,895 hit in April.

The U.S. Securities and Exchange Commission (SEC) is set to allow the first American bitcoin futures ETF to begin trading this week, Bloomberg News reported on Thursday, a move likely to lead to wider investment in digital assets.

Cryptocurrency players expect the approval of the first U.S. bitcoin ETF to trigger an influx of money from institutional players who cannot invest in digital coins at the moment.

Rising inflation worries also increased appetite for bitcoin, which is in limited supply, in contrast to the ample amount of currencies issued by central banks in recent years as monetary authorities printed money to stimulate their economies.

But some analysts noted that, after the recent rally, investors may sell bitcoin on the ETF news.

“The news of a suite of futures-tracking ETFs is not new to those following the space closely, and to many this is a step forward but not the game-changer that some are sensing,” said Chris Weston, head of research at Pepperstone in Melbourne, Australia.

“We’ve been excited by a spot ETF before, and this may need more work on the regulation front.”

 

(Reporting by Hideyuki Sano in Tokyo and Tom Westbrook in Singapore; Editing by Ana Nicolaci da Costa)

Continue Reading

Investment

These are the only times it's smart to make changes to your investment portfolio – CNBC

Published

 on


Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

Recent market volatility has many investors wondering if now is a good time to alter their investments.

The short answer experts generally advise? It’s rarely actually a good time to make changes to your investment portfolio.

“Most investors who jump in and tweak their portfolios typically do it in response to market conditions and history has shown us this just doesn’t work out in their favor,” says Tony Molina, a CPA and senior product specialist at Wealthfront. “What often feels right when it comes to investing, is usually wrong.”

Though you may feel tempted to modify your investments when the market dips, you’re often better off leaving them alone for the long haul. The reality is, downturns happen but your money is safer if you ride out the storm. Just as quickly as the market can go down, it can also go up — and keeping your cash invested throughout these fluctuations is what helps your money grow over time. This is especially true when investing in index funds and ETFs.

But, we wondered, is there ever a good time to adjust your investments? Turns out, there are a couple conditions when it’s OK.

Subscribe to the Select Newsletter!

Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly. Sign-up here.

When it’s a good time to make changes to your investment portfolio

While it’s typically best to leave your investments alone, you may want to change course if there has been a change in your investing goals’ time horizons, and consequently, your risk tolerance, advises Ivory Johnson, a CFP and founder of Delancey Wealth Management.

On one hand, you may find that you have extended the number of years until retirement and can take on more risk. Or, on the other hand, perhaps you’re retiring sooner than you thought and shortening that timeframe means that you need to put your money in lower-risk investments.

Using a robo-advisor is an effective workaround to avoid having to worry whether your investments match your risk tolerance. Robo-advisors have users fill out a brief questionnaire that helps them know how to best allocate your cash depending on your investment goals and the top robo-advisors will regularly rebalance your portfolio for you as needed.

Betterment, for example, will recommend a stock-and-bond allocation based on your goals and adjust automatically whenever you make a deposit, withdraw funds or change your target allocation. Betterment’s algorithms will also check your portfolio drift (how far you are from your target allocation) once per day and rebalance if necessary.

Betterment

On Betterment’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For Betterment Digital Investing, $0 minimum balance; Premium Investing requires a $100,000 minimum balance

  • Fees

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has a 0.40% annual fee

  • Bonus

    Up to one year of free management service with a qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash

  • Educational resources

    Betterment RetireGuide™ helps users plan for retirement

Terms apply.

The automated investing platform through SoFi Invest® automatically rebalances investors’ portfolios as well, but on a quarterly basis. SoFi is a good option for investors also looking for lending products as SoFi members receive a 0.125% interest rate discount on SoFi’s student loan refinancing and personal loans.

Johnson adds that he would generally change an investment allocation when a big event has taken place, such as a severe illness or a large economic windfall (like an inheritance). In both of these cases, an investor’s need for capital appreciation reduces, he says.

Molina agrees that a good time for investors to make changes to their portfolios would be in response to major life events. Specifically, he means events that put the investor in a position where they would need to access their investments in the near future (three or so years). Examples include marriage, a family emergency or as an investor nears retirement.

“This would be a good reason to reduce their investment risk or pull out their funds altogether,” Molina says.

Much of an investor’s decision to change their portfolio in this scenario depends on how soon they may need to withdraw their funds. “In general, if you need the funds within the next three years or less, you may want to consider changing your investment strategy,” Molina adds.

When it comes to investing in individual stocks, keep in mind that you should be using money that you are comfortable having tied up for at least the next five years. While individual stock investors are advised to hold for the long term (especially during times of volatility) in order to best maximize their returns, they may choose to sell a losing stock if it is more risk than they can handle and it generates significant financial loss. Investing in index funds and ETFs are an easy way to take on less risk and diversify your investments.

Bottom line

If you’re thinking of adjusting your investments, most of the time it’s probably not the best move for your long-term growth in the market.

The exceptions to this rule are if your time horizon and risk tolerance suddenly change. Another exception is if there has been a major life event where you no longer need your money to be invested, or where you could be better off financially with the cash accessible in your wallet.

Catch up on Select’s in-depth coverage of personal financetech and toolswellness and more, and follow us on FacebookInstagram and Twitter to stay up to date.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

Adblock test (Why?)



Source link

Continue Reading

Investment

Cushman Investment in WeWork Rests on Successful Stock Listing – BNN

Published

 on


(Bloomberg) — Cushman & Wakefield Plc agreed to invest $150 million in WeWork Cos., contingent on the flexible work company successfully completing its forthcoming stock listing, a person familiar with the matter said. 

The investment was born of a partnership the two companies unveiled Aug. 9. They said at the time that they were discussing a potential investment but hadn’t signed a definitive agreement.

A spokesman for Cushman said the company was pleased with the progress of the WeWork partnership but declined to comment on the investment. A spokesperson for WeWork also declined to comment on the investment. WeWork is preparing to go public via a $9 billion blank-check merger in late October.

The companies cited the effects of the Covid-19 pandemic as a catalyst for their accord. For many businesses, the return to the office has been a stilted process. Widespread vaccines in the U.S. brought some workers back, but the return stalled, along with vaccination rates, and outbreaks of new variants played a role.

“The partnership we announced with Cushman & Wakefield in August is a testament to WeWork’s long-term value proposition and we remain incredibly excited about the opportunities that lie ahead as we team up with one of the leading real estate firms in the world,” WeWork said in a statement Sunday.

The deal represents a marriage of old real estate and new. Cushman & Wakefied is more than a century old and one of the largest commercial real estate services companies in the world. WeWork is barely a decade old.

©2021 Bloomberg L.P.

Adblock test (Why?)



Source link

Continue Reading

Trending