2021 raises a lot of questions about investment strategy. That’s because 2020 was an unprecedented year for most markets. Many people are finding out that everything they thought they knew about money is, well, wrong. Entrepreneur Aristotle Varner offers his top five tips for having a strong investing year.
1. Balance Your Portfolio
“A diverse portfolio will steel you against adversity,” said Varner. Some industries really suffered in 2020, and some saw a tremendous boost. Having stock in a variety of arenas will strengthen your chances against economic hardship. “Additionally, consider having diverse types of investments,” said Varner. “Stocks, bonds, and real estate are all good ideas.”
2. Invest with Debt
A lot of people operate under the assumption that you should never invest in anything until you’ve paid off all of your debt. But folks with college degrees are finding that it can take decades to pay off student loans. “You shouldn’t wait until you are in your fifties to start investing,” said Varner. “Stay up to date on your debt payments, but this year you should set some money aside for investing.”3.Look at Tech Start-Ups
Many small tech businesses have benefited from people staying home and needing things to do. And plenty of additional start-ups have been inspired by this new trend. “Look for the small ones just getting started with a promising idea,” said Varner. “It’s a small investment, but it could pay off in 2021 as people continue to look for innovative tech solutions.”
4. Consider Your Age
When you are balancing your portfolio, you should consider your age. “Bonds are good investments when you are of retirement age because they are so low risk,” said Varner. “But if you are younger, try stocks or something with more growth potential.”
5.Think Long Term
In 2021, you should think long term with regard to your investments. “Some of your investments may not be performing well right now, and that’s okay,” said Varner. “Many things, like hotels and restaurants, should pick up in performance by the end of 2021.” Similarly, Varner says that 2020 has been a lesson to always have accessible assets ready on hand. “Maintain a rainy day mindset for long term success,” said Varner.
2020 taught us that the market can change at the drop of a hat. But 2021 is a new year with new potential. According to Varner, these five tips should guide your investment strategy to a strong financial year.