Investment Strategies for 2022

With the beginning of another year, it is the perfect time to inculcate new investment practices along with setting new resolutions and goals. Even if worse comes to worst, just remember that the best gains happen after the huge loss days. From expanding your portfolio to setting new targets for your long-term goals, these strategies will help you reach your financial goals by the end of the year:

Rebalancing Portfolios and Asset Allocation

Asset Allocation is a disciplined process which has been tested throughout time. To minimize risk, experienced investors with long-term plans may balance their portfolios by shifting a major part of their equity to dynamic asset allocation funds/balanced advantage funds which produce equivalent returns when compared to equity at half the risk.

Prepare for a Market Crash

With the new Omicron variant and general COVID-19 rise along with the increasing tensions between Russia and Ukraine another market crash was imminent so instead of focusing on the things you can't do, focus on what you can do like diversifying your portfolio and selling stocks which you think would be affected by this downfall along with boosting your emergency money.

Making a Value Play

Warren Buffet rightly said “Price is what you pay for stock, value is what you get”. Keeping this in mind you should always evaluate a stock before buying or selling it so that you can identify and differentiate between its price and value. Try to contemplate the market lapses that led to this difference between prices and value in the first place and then make your play.

Always Read the Company Books

Whenever a company goes public their profit and loss accounts, balance sheet and all their books become transparent for the public to evaluate the stock before investing. Doing this will provide you an advantage over others as you will be able to compute different ratios and evaluate if that company is going strong or down under.

Don’t overlook the IT sector

Throughout Covid-19, numerous IT companies played a significant role and made record sales. Many companies from this sector started enhancing and capturing the market making this truly the golden age of modern technology. Thus, proving that this sector is always developing and growing.

Underpriced Companies

Your goal should always be trying to find those companies that are undervalued and can sustain and win in the long run like startups and digital companies with strong business models.

Downward Correction in the market is not the time to pull out

Downfalls in the equity market are considered temporary and the ups are considered permanent by some analysts so whenever the market is falling or rising just remember that a company with value will always correct itself after a bear run.

Find a Mentor

Investment gurus such as Warren Buffet or Phil fisher are some of the experienced greats whom people look upon for advice. You could also start following any of these mentors online or offline who may provide you with latest investment strategies along with tips and tricks.

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