Market Shift Alert: Your Opportunity in this Very Minute

Derivatives

Yield curves.

P/E ratios

Arbitrage

Cryptocurrency

Commodities

Annuities

REITS

Spiders

The sheer quantity of financial jargon and investing possibilities available might make your head spin. It's difficult enough for many of us to find time in the day to do laundry, let alone sort through countless—and sometimes perplexing—options to develop a strong financial strategy.

But here's the good news. You don't have to be an excellent stock picker, market timer, or money manager to design and stick to a smart investment strategy. You only need to put some basic building elements in place.

"The most important part of investing is not picking individual investments, but having the right asset mix that takes into account your time horizon, risk tolerance, and financial situation to help you reach your goals," explains Robert.

Important first step: Your savings foundation

The foundation of your savings is an important first step.

According to Robert, your first step should be to ensure you have the fundamentals of your financial wellbeing in place before diving into building an investing plan.

Save enough money to construct an emergency fund that can cover 3 to 6 months of living expenses and to pay off any high-interest debt. If your employer has a 401(k) plan that matches a percentage of your contributions, be sure you contribute enough to receive the full match

“It’s like free money,” Robert says.

Once you get those things squared away, you can focus on creating an investment strategy to help build wealth that works with your busy life.

Here are 6 ideas to consider.

1. Consider mutual funds and ETFs

To be a "real" investor, you don't have to spend hours poring over financial statements and paperwork. If you prefer to handle your own assets, mutual funds and exchange traded funds (ETFs) can help you swiftly and efficiently fill your investment mix. Funds are a collection of stocks or bonds that allow you to invest in many securities at once.

The advantages of employing funds include ease, diversification in many circumstances, and professional management in the case of actively managed funds. Fees, which are frequently linked with running funds, can be one of the disadvantages. There may also be taxes to consider if you invest outside of a tax-advantaged account such as an IRA, health savings account, or 401(k).

There is some good news—birizon offers Trading bots that are programmed to cover all those expenses and help reduce transaction fees.

2. Look into target date funds

Target date funds might assist you in meeting your financial objectives with minimal effort. These funds, as the name implies, are intended to assist you in meeting specific time-based financial goals, such as having a set amount of money for when you retire or your child begins college.

They are quite simple to use. You only need to choose a fund that matches your goals. If you aim to retire in 2040, for example, you can choose a "2040 fund," which will reallocate investments as the fund approaches its target date.

"As they approach their target date, these funds automatically adjust their asset allocation from higher risk to lower risk on a roll-down schedule," Robert says.

This investment instrument, sometimes known as a "glide-path fund," is available in many 401(k) plans. (The phrase glide path refers to how asset allocation evolves from more aggressive investments to more cautious investments as the target date approaches.)

Target date funds, like other investments, have advantages and downsides. One possible disadvantage is that you cannot tailor the holdings to your personal financial position.

3. Let a robo-advisor do the investing for you

Another option is to take advantage of technology and utilize a "robo advisor." You answer a few questions about your financial goals, timetable, and risk tolerance when you use a robo advice service. This data is then used to develop a strategy for you.

A hybrid robo-advisor is another option if you want to mix a personal touch with technical developments. You can often have the best of both worlds with a hybrid advisor: access to automated intelligence and the option to speak with a financial coach over the phone or on video.

Birizon is developing an automated advisor that will be available shortly, nevertheless our bots already include a robo advisor that can help you restructure your portfolio management.

4. Invest in a model portfolio

Consider a model portfolio as another way to reduce your stress. This strategy may suit those who do not want to construct a diverse portfolio from the ground up but still want to be involved. For example, investors who use Birizon's model portfolios must purchase the assets separately, examine their investments annually, and rebalance as needed.

Each model is tailored to the demands of certain investor profiles, with asset classes and allocation percentages defined by financial experts. For example, if you are enthusiastic about sustainability and prefer conservative investments, you can hunt for a ready-made model portfolio that corresponds with your principles and risk tolerance..

Contact us to explore model portfolio

5. Consider a managed account

Managed accounts provide more immediate and continuous assistance. These accounts are customized and often overseen by a financial professional.

"Managed accounts often make sense when you want the experts to manage your money for you in accordance with your goals," Robert explains.

Working with a financial advisor provides numerous advantages, he says. An advisor can assist you in taking a comprehensive look at your financial situation, including retirement, taxes, estate planning, and insurance.

"It can be beneficial to work with someone who has your best interests in mind and can assist you in many aspects of your financial life," Robert explains.

6. Put your contributions on autopilot

Want an easy, procrastination-busting way to invest? Set up regular transfers from your paycheck or bank account to your investment account.

Automating regular contributions to a 401(k), other retirement accounts, brokerage accounts, or a health savings account takes the pressure off you to remember to transfer money.

“Setting up auto-invest is a great way to take the stress off and be less prone to emotional decisions that can derail your financial plan,” says Robert.

Once you opt into a 401(k), your contributions will typically be auto invested, he notes. But you’ll have to set up the auto-invest feature on other investment accounts.

If you make a habit of contributing regularly, such as biweekly or monthly, it will save you the cognitive strain—and potential missteps—of determining the best time to buy.

Automation allows for dollar-cost averaging, which is when you invest a fixed amount of money at regular intervals, regardless of how the stock market is performing. By continually investing, you’ll be well positioned to buy shares when prices are low and not be sitting on the sidelines when the market has a large upswing.

Automation also goes beyond just transferring money. Some employers let you set automatic percentage increases to your 401(k) for each forthcoming calendar year. For instance, if you contribute 7% of your pay, you could schedule one-percentage-point increases, so your contribution would automatically bump to 8% the next year and 9% the year after up to the maximum allowed.

Increasing your contribution by a mere 1% each year can significantly improve your financial situation in retirement. If your 401(k) plan doesn’t have an annual increase feature, you can simply set a recurring reminder in your calendar to go in manually each year and bump up your contribution yourself.

Get going now

So don’t delay. Start building your future now by putting a plan in place. Or call us to help you.