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A Short Guide for Budding Investors

Many were taught at a young age that saving is the quickest way to accumulate wealth and achieve financial independence, but this is not always the case.

According to experts, for people to ensure that they can save money, at least 20% of their salaries should be allotted for it. However, in research where roughly 3,000 U.S. consumers were surveyed, it was found that 70% of millennials were living from paycheck to paycheck, along with 60% from Generation X and 54% from Baby Boomers and seniors.

This goes to show that there is a clear disconnect between people’s financial goals and the reality they face every day which makes saving money difficult. While saving allows them to set aside money for future use, it decreases their finances for their present needs. With that, it becomes wiser to invest their money.

Investing allows people to grow the money they can set aside. When people invest, they only need to let go of their pooled assets at least once, wait for them to earn, and live day to day without thinking about how much more to save.

This will not only make their lives easier but also open their doors to a greater possibility of financial freedom in the long run.

So, if you are looking to invest your money and ensure greater returns, read along with this short guide before investing:

1. Adopt an Investor Mindset.

Investors have a long-term mindset which allows them to take risks and surpass stock fluctuations. They study and understand the investment they make, and how the market behaves in certain ways at certain times. 

If you are looking to invest, it is vital to adopt the mindset that major investors have. To this end, you must understand how the market works, study the different types of investment and how they will work for you, as well as the risks associated with them. This will allow you to make a sound investment decision and ensure that you are spending your assets wisely for a greater return.

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2. Remember that Risks are Inevitable.

No investment is free from risks. Whether you are trying to invest in stocks, bonds, or real estate, you cannot control the risks associated with them as the market fluctuates from time to time, potentially affecting your financial welfare adversely. 

What you can do about this, though, is to control your approach to managing the risks associated with your investment. Some investors indeed succumb to impatience as they leap in and out of the market, which ends up hurting the long-range performance of their portfolios.

However, you can avoid this by understanding your risk tolerance and making your investment strategy according to it. This way, you will be able to withstand the challenges of the market and reduce the risks of losses on your end.

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3. Don’t Put All Your Eggs in One Basket.

No matter how great the return of your asset can be with one particular type of investment, it is wise to not put all your money into it. Remember, investing always comes with risks. The greater your investment is, the higher the risk becomes. Although this could mean higher returns, it could also mean losing more than you can earn.

To protect your finances, it becomes crucial to diversify your assets. This means that you have to invest in a wide range of products across different industries to reduce the risk of losses on your part brought about by the ever-changing market conditions. When you diversify, you will have a fallback with your other investments if one of the markets you invested in incurs serious losses. This will allow you to maximize your returns in the long run.

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4. Seek the Guidance of Financial Investment Firms.

Financial investment firms house highly qualified financial advisors who would help you create an investment strategy according to your financial capacity and risk tolerance. Aside from that, you will be able to learn how to monitor your assets and the market with their help.

If you are looking to make a secure investment, reach out to AIX Investment, an investment firm that houses the best financial advisors in Dubai to help you get started.

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