Each week across the ACM network Ali and Gaby Rosenberg offer quick tips for big wins in understanding your money. The sisters are co-founders of the Blossom micro-investing app.
You will have heard the noise around bitcoin recently, with the world's largest cryptocurrency hitting record highs in March. Even if you have set your investment strategy, it can be tempting to change your approach based on a new opportunity or information. Before you make any big decisions, here are our six top tips for smart investing:
1. Be 100% clear (or as close as you can get) on what you're investing in
You'll never have peace of mind if you've put your money into something you can't easily explain to the next person. Feeling financially secure comes from having clarity and confidence about where your money is, so do your own due diligence first.
2. Have cash to spare
If trying out a new investment means you'll have to dip into your holiday fund or your home deposit savings, the rises and falls take on a whole new dimension (and level of stress). You'll be much more likely to be able to make rational decisions if your existing financial commitments aren't affected.
3. Don't decide on the day
Another easy way to make considered investment decisions is setting up automated contributions. If you've decided you can comfortably set aside $100 a month for investing, set up a direct debit and forget about it. This also prevents you from changing course based on what the crowds are doing.
4. Know where your exits are
One of the most common reasons investors lose control of their money is getting in without knowing when to get out. Whether it's a moment in me or a dollar value, define what success (or the lack of it) looks like for you, and exit when those conditions are met. Being able to stick to your plan is a lot more satisfying than being at the mercy of the hype.
5. Be wary of chasing your losses
Losing money is a terrible feeling, and sometimes it feels like the only solution is to turn your loss into a win. If you follow Tip #4 and get out when you said you would, you also protect yourself from the downward spiral. As we've said, we're big fans of diversifying your investments, because it takes into account that wins and losses often won't come from the same place.
6. Make sure it's a match
From bonds, to stocks, to bitcoin, each carry (sometimes wildly varied) risk profiles. Make sure your new investment matches your appetite for risk and you'll have a much more enjoyable experience.
Finally, whilst we encourage careful and deliberate decision making when it comes to investing, time is also a critical factor in realizing meaningful returns. It's why we've made it our mission to democratise fixed income investing and work relentlessly to level the playing field! If you've done your research and followed the 6 Golden Rules, you should be on the best path for taking home a win.
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Sisters Ali & Gaby Rosenberg are the co-founders of Blossom App.
- Nothing in this article should be construed as being personal financial advice. It is general in nature only and has not taken into account your particular circumstances, objectives, financial situation or needs. You should consider whether the information, strategies and investments are appropriate and suitable for you or seek personal advice from a licensed financial planner before making an investment decision. Past performance does not indicate future performance. BlossomApp Pty Ltd (ABN 74 644 216 151) is a C.A.R. (No. 001284228) of Gleneagle Asset Management Ltd (AFSL 226199). Consider the PDS and TMD at blossomapp.com to ensure the product suits your needs.
- ACM co-owner Alex Waislitz has a stake in a company that provides services to Blossom. ACM is the publisher of this masthead.
