Smart Investment Strategies For Superior Returns In Any Market

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The total value of stock markets worldwide hit a record high of $95 trillion in 2020, CNBC reports. As many as 55% of adults in the United States have invested money in the stock market, which is undoubtedly a volatile place. With plenty of ups and downs and a general lack of control surrounding the market’s performance, it’s not surprising that such conditions can put people off investing. However, by making the most out of smart investment strategies, you can increase your chances of successfully coping with both calm and volatile market conditions.

Investment_strategies

Consider covered calls

A covered call strategy can be a smart way to increase your investment income without extra market risk. It involves selling either one at-the-money (ATM) or out-of-the-money (OTM) call option for every 100 shares of stock you currently hold. After collecting the premiums, you then wait for the call to either be exercised or expire. If it’s exercised, you sell the stock at stake price. Otherwise, you simply keep the stock. Moreover, using a dedicated software platform can help you better generate profits with covered calls. For example, Born to Sell gives you access to a comprehensive database that lets you find lucrative investment opportunities with potential covered calls. You can also input your income goal and available capital to effectively narrow down your search results.

Build a balanced portfolio

Make sure your portfolio is as strong and diverse as possible by including a good mix of stocks and bonds. Generally, you should aim to have 40% of your portfolio in bonds, and the other 60% in stocks — but this estimate may change depending on your unique financial circumstances, including how long you have before you plan on retiring. Also be sure to have a number of safe yet low-yielding strategies focused on preserving capital (rather than growing it). Such strategies may include investment-grade bonds, certificates of deposit, investment-grade bonds, and blue-chip stocks that pay dividends. By also mixing in strategies designed for growth (like preferred shares, debentures, or higher-yielding corporate bonds), you can successfully create a balanced portfolio, which provides strong returns on your investments, as well as a good chance of capital preservation.

Maintain a long-term approach

When it comes to investing, short-term trades aren’t as lucrative and reliable as long-term ones, which involve buying stocks and holding onto them for a long period of time, usually many years. According to Warren Buffet, one of the world’s richest investors, the key to successful investing is maintaining a long-term approach. This essentially means being disciplined and waiting to buy the right company at a fair price, which naturally comes with a decent safety margin to reduce investment risk.

Although the stock market is bound to fluctuate throughout the course of your lifetime, there’s no need to fear it. By embracing smart investment strategies like covered calls, a balanced portfolio, and a long-term approach, you can successfully weather volatile markets for years to come.

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Smart Investment Strategies For Superior Returns In Any Market
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Although the stock market is bound to fluctuate throughout the course of your lifetime, there’s no need to fear it.
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