What Do You Include in an Investment Plan?

It’s much easier to get yourself on the right track for wealth growth and portfolio development when you have a plan.

More than just a list of strategies and methods, a plan gives you a goal to focus your sights on as you’re working your way towards financial independence. With the right solution in place, you’ll know how much to save, how much to spend, and when to switch courses.

The first step in developing a successful plan, is to complete a cash fact find. In other words, take stock of your current situation. Do you already have an emergency fund in place? If not, you’ll need to deal with that before you begin looking into stocks and funds. How much do you feel comfortable investing in different assets, and what risk level are you comfortable with? Once you have that information, you can begin to work on your plan.

Laying Out a Basic Strategy

Drawing on the information you have from your fact find, you should be able to set out your goals for your money and the kind of things that will help you to achieve them. For instance, are you going to be looking into swing trading strategies, or long-term investments? Your time frames for when you want to reach your targets, your current financial situation and your risk appetite will all help you to figure out where you should be heading. Your plan can also give you an insight into the kind of returns you need, and what you can expect to reasonably accomplish. If you’re having trouble with this part, it may help to speak to a qualified advisor about your options.

You can also speak to an advisor about how much of your plan you want to handle on your own and how much you need to get assistance with. You can also determine how frequently you’re going to check on how your strategies are doing, and under what circumstances you might make changes to your portfolio. Check out any kind of fees and product charges you’ll need to think about at this time too, so you know what’s going to be eating into your earnings.

Putting your Plan to the Test

Once you’ve got a basic idea of how you’re going to reach your goals and what you want to accomplish with your money, the next step is putting your strategy into action. The important thing to remember here is that you can take things slow until you figure out whether your strategy is really working for you. There’s no need to spend a small fortune on your initial assets and shares straight away. You might even decide to do some paper trading first. This essentially means that you open a demonstration account where you can see exactly how profitable your efforts will be in practice. You won’t make any money with the paper account, but you can put your ideas to the test without any risk too. Remember to come back and update your plan from time to time when the situation calls for it.

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