5 Tips On How To Improve Your Returns Without Investing More Money
Investors often think that the only way to achieve stronger returns is to put more money into their portfolio, but with the right strategy anyone can improve their earnings.
For some investors their portfolio might simply be performing a little poorly, but for others there could be signs that they’re on the road to losing money.
This is because their portfolio could be on the verge of going downhill, with investments performing increasingly badly and on the edge of collapsing. Every investment portfolio is matched against a benchmark, and if you find that your portfolio isn’t performing as well as your benchmark then this could be a sign that your portfolio is not structured properly and needs some help.
When you find that your portfolio is struggling, it’s important that you take immediate action to ensure that you get it back on track and earning you the returns you expect from it.
It might take time, research and commitment, but investors who are dedicated to their craft and are willing to put in the time can reap big rewards. To help you get started, we’ve put together a list of 5 top tips on improving your returns without putting in more capital.
- Evaluate Your Investment Strategy
When you first start trying to improve your returns, the first thing you need to do is review your investment strategy. It’s possible that there are some areas where you can improve your returns easily by moving money into different markets or asset classes. If you find that certain trades are not earning the returns you want then consider changing them by following the strategies used by other successful investors.
- Diversify Your Portfolio
Many investors choose to put all of their money into one asset class or market that they’ve had success in previously, but that’s not always the most profitable or sensible investment strategy. To create a portfolio that’s as risk averse as possible, it’s important that you put your money into a range of different asset classes in completely unrelated markets. If your portfolio isn’t diverse enough currently then think hard about the other areas of the financial space that you can invest in so that you keep your money safe and maximise your returns.
- Change Your Thinking
As an experienced and successful investor, you might think that you’ve got the process down to a fine art. But there’s evidence to suggest that your psychology can have a strong impact on your approach and, therefore, the results you get from it. Check out IG’s interactive tool to find out more about how your trading can be affected.
- Find Tax-Free Investment Vehicles
Taxes can be a significant drain on your profits, so try to invest some of your capital in tax-free alternatives, such as National Savings and Investments premium bonds, venture capital schemes such as EIS, or a seed enterprise investment scheme. Or you could look at speculating via spread betting or CFD trading, which offer tax benefits in the UK. Investing in, or trading via, some of these alternatives could reduce the cost of your portfolio and raise your returns. So, do your research and try to find the options that aren’t taxed in the country that you’re domiciled in.
- Remember To Think About The Long Term
It can be easy to think about short-term profits, but you should be looking at the long-term benefits of your investments. While a few years or even a decade may seem like a long time, for an investment it’s barely the blink of an eye. So, you need to have a plan that will not only give you immediate returns, but also long-term stability. This means not moving your money around unless you absolutely have to.
Remember to always invest responsibly, and should you find that an investment is making strong losses then take the time to investigate before making a decision and moving your money. This approach will ensure that your investment portfolio continues to take care of you and keep you in the style to which you’ve become accustomed throughout the rest of your life.
Improving returns involves a lot of hard work and planning, but by following these tips you can get yourself on the path towards earning more from your investment strategy. Always remember that investing is a long process, so you need to be committed to exploring all the options available to you and selecting the ones that’ll work best to achieve your goals. Investing all of this time and effort will eventually pay off when you’ve achieved the returns you need to enjoy the lifestyle you want.