As we enter 2023 and look to make our New Year's resolutions, why not look to start investing and move towards gaining financial freedom?
Dec. 27, 2022
Being better with your finances is one of the most common New Year's resolutions around the world every single year. This year, why not take a leap into the world of investing and reap the benefits that the stock market has to offer?
We've come up with five resolutions that will have you well on your way to financial freedom. Even if you're far into your investing journey, some of these might help revitalize your portfolio.
1. Get Started
The main thing to do if you're resolving to begin investing this year is to actually do it! In order to allow the wonder of compound interest to work its magic, you need to give it as much time as possible. By starting your investing journey now, you give your money time to grow and multiply.
Paralysis by analysis is a common affliction for those looking to start something new. Investing comes with a lot of new information and it's easy to get overwhelmed. That's why we're here to help. MyWallSt offers a whole host of free information for you to get up to speed quickly. Why not check out our 'Getting Started' section, so you can do exactly that: get started!
2. Be Consistent
A saying you might hear as you begin investing is "time in the market beats timing the market." Essentially, what this means is that trying to pick the perfect time to buy a stock almost always works out worse than just getting into the market as early as possible.
One easy way to do this is to use a strategy called dollar-cost averaging. To put it simply, this involves putting a set amount into your investing account every week or month. By doing this you build up your investments gradually and avoid having to worry about the general volatility of the market.
Dollar-cost averaging is an amazing way to ease yourself into investing without a large up-front commitment. It also allows you to be extremely consistent with your investing as you have an easy-to-follow plan.
3. Educate Yourself
When it comes to investing, education is extremely important. Now, we're not saying you have to do in-depth research on every company you find, but a little bit of knowledge goes a long way!
Maybe you know about a company because you use it every day. I've been using Nike clothing and equipment all my life, so when it came to my first investment it seemed like a no-brainer! The knowledge I had from my own experiences made it easy to pick a stock that I loved.
Use your own knowledge to help choose the right stocks for you. For everything else, however, you can rely on MyWallSt to fill in the gaps in your investing education. Our blog is a great place to start to read up as much as you want on stocks and investing in general.
4. Maintain a Diversified Portfolio
Diversifying your portfolio might not be the most pressing issue as you begin to invest, but it's definitely something we could probably all do with adding to our resolutions. A diversified portfolio helps reduce risk by holding stock from a wide range of categories. You can diversify in many ways: geographically, through ETFs, or using different industries.
There are no real guarantees when it comes to investing, but you can bet that over a prolonged period of time, some of your stocks will inevitably lose value. Volatility will always play a role in the stock market, so owning a diversified portfolio will help offset massive losses and lead you to financial freedom.
5. Invest What You Can, When You Can
It's fitting that both the first and last of these resolutions come straight from MyWallSt's Six Golden Rules. Here, we advocate that you only ever invest what you can afford. Investing can be an intimidating prospect, especially if you've never done it before. The Financial Crisis still looms large in the minds of many, so it's only natural for people to be wary of investing their money.
Dollar-cost averaging is a great way to ensure you only invest what you can as it gives you a set amount per week or month that you can plan for. It also means you don't have to invest huge amounts at once that you might need in the near future.
