It’s never too early to be thinking about your financial plan for 2023. Part of how you manage money wisely is deciding where you want to invest. The market has been a challenge for even the savviest investors, thanks to inflation and continued pandemic recovery and issues with labor and supply chains. Knowing where to invest money in 2023 requires a keen understanding of your own investment goals as well as a willingness to stay steady even as the market fluctuates.
Here are some great suggestions on how to invest and where to invest money in 2023.
How To Invest Money In The New Year
Your investment strategy will depend on your investment goals, but there are several important considerations to keep in mind as you decide how to invest.
First, make sure you’re utilizing any retirement plans your company has. This is an excellent way to deposit pre-tax portions of your salary into an investment account so it can grow while you wait to retire. If your company matches contributions, that’s even better. You can look at this as an invisible raise; your company is paying you more but instead of landing in your paycheck, that money is invested.
Next, think about investing outside of retirement. More than half of all U.S. families invest in stocks and bonds. You can create investment portfolios that meet specific goals, such as buying a house or sending a child to college. Saving money through investments will often yield higher returns than simply holding the money in a bank account. Make a plan for how much you’ll contribute and where you’ll put those contributions.
Finally, educate yourself. This is an important “how” when it comes to investing. You need to learn enough about the market to anticipate trends and evaluate risk. There are plenty of ways to stay up to date and informed. Start by downloading personal finance software that will give you a clear snapshot of where you are financially. Read financial blogs, follow market advice from experts, and pay attention to economic news that impacts financial sectors and any of the industries in which you might hold investments.
Where To Invest Money In The New Year
It’s hard to know what the markets will do in 2023. A diversified investment portfolio will always protect you against risk and ensure some kind of growth over the long term. Make sure you’re not putting all of your investment funds into a single stock or even into a single sector, such as real estate or treasury bonds. Put together a mix of different investments so you won’t lose everything if one of those investments begins to disappoint you.
Target-date funds are a great idea because they spread your investment dollars out among different stocks, bonds, and other assets, depending on when you plan to use the money you’re investing. This can be helpful when you’re investing for retirement, planning for college, or saving for something else. Set a date, schedule automatic investments, and leave your money alone.
Consider treasury bonds as well. While these investments aren’t always as exciting as high-yield stocks and funds, they’re certainly having their moment thanks to higher interest rates. You can expect to earn from six percent up to nine percent if you invest in the right bond at the right time. Earn more by holding the bonds for longer.
Do real estate investments make sense for you? This is an especially wise investment in 2023, because many experts are predicting a recession. Real estate is an excellent hedge against inflation, because it’s a tangible asset that may increase and decrease in value but will always remain what it is: a home or an apartment or a building. Look for ways to invest in real estate, whether it’s buying and renting out a property or joining a real estate investment trust (REIT).
Final Tips On Investing In 2023
As you put together your investment plan, remember to make things as easy as possible for yourself. Set up automatic investments. Sign up for your retirement savings plan at work. Diversify your holdings, and educate yourself. When it makes sense, work with a financial planner and make sure you have access to the best personal finance software.