Where do I allocate my cash? The answer to this question has never been so difficult due to the fact that investors and traders are breaking their mind trying to get worthy return.
Life was much easier for investors before
because boom market brought eve-rising prices in the stock and real estate
markets, which let savers obtain a good yield. Not only that but deposits,
treasury bonds and commodities were another source of income for years.
Unfortunately nowadays only investors with
highly risk exposure can achieve reasonable returns. It is needless to say that
stock markets are at their maximum and the government bond, which
traditionally were “heaven assets”, are no longer a protection against the
downfalls.
Even though businesses seem more stable and
the economy is growing, volatility and uncertainty dominate markets. As you
should know what drives the market are the psychological insights rather than
evidences and hard facts.
In my opinion financial advisors are going
to develop a crucial role in the coming years. Whitout a doubt if it is not
possible to get bigger returns you have to explore new investment horizons,
taking a step further from old and possibly irrational ideas. People should
trusth financial advisers whose knowledge in risk control and assets
characteristics gives a market`s professional perspective. Not only should
people question their own impressions but also stop to invest according to
their inner instinct.
Whether people decide to hire a specialized
analyst or visit a branch asking for advice, it would always be worth improving
their financial knowledge and try to put away the short - sightedness.
First and foremost people ought to create a
diversified portfolio being concious that the more risk they assume, the higher
their losses could be.
Regarding the percentage of a portfolio
invested in stocks, people always need to analyze the loss thty might possibly
suffer. Emphirical facts show us that forecast of future stocks market
fluctuations are far more optimistic than past – term returns would justify.
Only if you take this into account and never overestimate returns, can you
become a successful investor. Indeed you
wil need to analyze hundreds of ventures and judge dozens of sectors with the
aim of choosing the most undervalued stocks.
All in all, though my initial question does
not have an easy answer, it could be the door to enter a completely new
financial world for many investors.
