The start of a new year tends to spark aspirations for positive change. For investors, it is the perfect moment to refine your strategies and set fresh objectives. Whether you are venturing into investing for the first time or are a seasoned trader hoping to fine-tune your approach, setting a few financial resolutions can help you achieve your goals in 2024.
No matter your resolution, it should – at least in some small way – help steer your investment journey towards growth and stability. So, let us explore five financial resolutions that could potentially turn your humble dreams into lucrative achievements.
1. Expand your knowledge
Like so many things in life, investing is a continuous learning curve. So, by expanding your understanding of financial markets, you can teach yourself to make more informed decisions while also minimising risks. Building a robust knowledge pool will give you the necessary tools to navigate the dynamic – and often turbulent – world of investing. But remember that it is not just about understanding stock markets. Instead, you should be able to monitor market trends, understand economic indicators and know the underlying principles governing different asset classes.
Start by researching familiar local companies, like Woolworths Group Limited (WOW) or Coles Group Limited (COL). Then, as your confidence grows, you can explore more diverse sectors listed on the ASX, which can open doors to broader investment opportunities.
The eToro Academy is an invaluable resource hub that provides you with myriad educational materials, from detailed courses to insightful guides, and it caters to both beginner and experienced investors.
2. Set investment goals
Goals are like guiding lights peppered throughout your investment journey. Most investors set themselves a mix of long-term and short-term goals, ranging from saving for retirement or a deposit for a house to funding their children’s school fees or paying for the ultimate dream holiday.
First, you will want to determine how often you wish to invest. Do you prefer an active approach, or are you more passive in acquiring new assets? Active investors are more like traders, reacting to market changes at a moment’s notice. In contrast, passive investors tend to hold their investments for extended periods, hoping to ride out market fluctuations.
Understanding your risk tolerance is also fundamental. Your risk appetite will differ from other investors – some are very comfortable with higher risks as long as they might deliver potentially greater returns, while others prefer lower-risk investments to preserve their capital. Your risk tolerance should dictate your asset allocation, where risk and reward are balanced according to your comfort level.
3. Explore new markets
Diversifying your investment portfolio in 2024 might involve exploring markets beyond those familiar to you. There is a vast ocean of markets and exchanges to explore, each of which brings unique opportunities. Beyond local exchanges like the ASX, there are prominent markets like the New York Stock Exchange (NYSE) and Nasdaq and opportunities in emerging markets.
In addition to different markets, there is an assortment of investment assets to dive into – from traditional stocks to commodities, forex and more. Exchange-traded funds (ETFs) can be a good entry point for newcomers as they provide exposure to a diversified basket of assets within a single investment.
4. Start small, but start now
The good news about investing in the ASX is that it does not require substantial upfront capital. Consider the power of compounding returns, where even small investments can grow in leaps and bounds over time. While your immediate gains might seem modest, consistent investment and reinvestment can deliver substantial returns in the long run.
For new and experienced investors, eToro’s Demo Account can be extremely valuable. Here, you can experiment with various strategies and investment approaches in a risk-free environment before committing your real money. It is an excellent way to refine your skills and gain confidence without any of the financial risk.
When you are ready for the real deal, eToro is a highly accessible platform where you can start investing with as little as US$10. That means you can gradually increase your exposure as you gain more confidence in the market.
5. Review and adjust your portfolio regularly
Every quarter or so, make sure you review and adjust your portfolio to account for changes in the market. This is an effective risk-management strategy that will help realign your portfolio with your investment goals. To help you stay informed and make smarter investment decisions, there are plenty of resources available on eToro, including:
Also, consider looking further afield to get insights from market analysts, financial reports, local and international economists, and industry leaders like Warren Buffet. The more knowledge of industry trends you have, the more informed your decision-making will be when it is time to review and adjust your portfolio.
When preparing to invest in 2024, set clear goals and commit to broadening your knowledge of the markets. With eToro’s diverse resources, making the most of your investments over the next 12 months can be more streamlined.
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This communication is general information and education purposes only and should not be taken as financial product advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial product. It has been prepared without taking your objectives, financial situation or needs into account. Any references to past performance and future indications are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.