6 Proven Strategies for Maximizing Your Investment Returns

Every dollar you spend on your investments, ideally should return a handsome some every time it’s cashed in. While no investment is guaranteed to succeed, it’s important that you’re being careful with your investments and doing what you can to maximize the ROI.

Whether you’re new to investing or you’ve got plenty of experience in the world of investment, there are certainly some tips and strategies that will help maximize the money you put into the assets. Here are a few ways in which to do it for your investment portfolio this year.

1. Diversify your portfolio 

Your portfolio is something that you want to build upon over time. While building it up with multiple properties for example is a great way to build your wealth, it’s also going to add more risk to your portfolio.

However, if you’re diversifying the type of properties you buy, whether it’s flipping a property or keeping it to let out, that helps to spread some of the risk.

Better yet, it’s worthwhile looking at how to build a diversified portfolio through various assets beyond just real estate. You have stocks and shares, cryptocurrencies, and many other investment types that are worth exploring.

The more diverse your portfolio is, the better it will help you mitigate the risk. Of course, no investment is without its risk and every investment could be one that ultimately fails. However, unless you’re really unlucky, or haven’t diversified your portfolio enough, being sure to explore the investment market as a whole is worthwhile.

2. Identify your investment goals and make them realistic

Your investment goals are something that you want to outline from the beginning. Every investor will have something different when it comes to their idea of objectives and goals. 

It’s therefore worthwhile thinking about what you want to achieve from the goals you set for your investments in the coming months or years ahead. Are you looking to have investments that last beyond your lifetime or are you hoping to cash them in before you retire?

For some, the investment is for their children, while for others, it’s more for the benefit of themselves. Identifying your investment goals is an important step to making sure that every investment you make is a step in the right direction to your success.

3. Always assess the level of risk before committing

The level of risk is something you want to assess carefully before committing. Some investment opportunities with come with a small amount of risk, while others will have a larger amount of risk but bigger returns.

It’s always useful to look at the risk assessments of each investment so that you understand how much you’re risking and whether it’s right for you. If it seems too risky, it’s always best to trust your gut and back out before you commit your money. If the risk is something you’d be happy to take on, then it’s worth proceeding.

4. Minimize the impact of taxes

Tax can often have a big impact on the investments you make and some investments have some additional benefits whereby you can offset a lot of the expenses that come with it. As such, any profits you’re making through your investments can be minimized when it comes to the tax you’ll pay on them.

Consider what level and amount of tax you’ll be paying on these investments and be sure to consult experts if you don’t have much knowledge when it comes to submitting tax returns and tax expenses in general.

5. Protect your assets

Protecting your assets is an important one when it comes to your investments. While your investments might be making you money, you don’t want them to be tied too closely to your personal assets.

From personal savings to property you live in, these are assets that you want to keep separate from your investment portfolio and to ensure they’re not used for the purpose of finance, in case your investment goes under and you owe money as a result.

6. Always be mindful of what you can afford to lose 

When you begin investing, it’s important to always be mindful of what you can afford to lose. While some investments might seem like a great opportunity, you want to think about how much money you’re spending and whether you can afford to lose it all, should the worst happen.

To help maximize your investment returns, make use of these proven strategies to ensure you make as much money as possible this year and every year you have an investment.