A Millennial’s Guide to a Solid Investment Portfolio

Millennials are now comprising a greater portion of the general population than ever before. If you fall into this widening category, you’re probably looking for ways to save for the future and to create a financial ‘nest egg’. The main question is how to begin your journey and how you’ll be able to identify lucrative opportunities which compliment an increasingly fluid lifestyle. Let us take a look at some innovative tips and tricks to keep in mind along the way.

Tapping into the Youthful Generation

It is estimated that there are now more than 13.8 million millennials within the United Kingdom alone. This demographic makes up a sizeable portion of the investment market as a whole. The primary reason why this is important arises from the fact that these individuals tend to be extremely familiar with emerging technologies and potential investment opportunities. It is therefore wise to consider allocating a portion of your portfolio towards tech-related shares. Not only is this entire sector on the rise, but major firms such as Microsoft offer handsome quarterly dividends in addition to standard profits.

Spread Bets

Spread betting is another particularly popular form of investing, as you are not subject to capital gains taxes. In other words, any profits generated are yours and yours alone. These funds can then be reallocated towards your personal interests or your budding business.

Another distinct advantage associated with spread betting is that you are able to trade on margin. Leveraging, or trading on margin, is defined as the ability to obtain a sizeable holding without being required to purchase its entire value. The predominant benefit here is that your profits could far outweigh your initial capital input. However, a word of caution should be mentioned. Leveraged trades are also associated with greater levels of risk and losses could quickly mount. This is the reason why such a method should only be used after you’ve gained a significant amount of experience.

Capitalising Upon the Movement of Currencies

Some will argue that Forex (currency) trades are by far the most popular investment option for millennials. This primarily arises from their inherently liquid nature. Spot trades can produce handsome profits within relatively short periods of time; a benefit not often associated with other holdings such as blue-chip shares. Additional advantages associated with the Forex sector include:

  • Access to the markets 24 hours a day and seven days a week.
  • The ability to access multiple types of currencies.
  • Tight spreads.

Larger firms such as CMC Markets are able to provide you with remote access to these markets via bespoke mobile applications, so keeping up-to-date with the latest movements is no longer a concern.

Why is Diversification Important?

Some millennials adopt the ‘here is now’ stance in terms of profits. However, we need to keep in mind that sustainable wealth won’t happen overnight. This is why a diversified portfolio is able to provide you with the stability that one-off trades rarely offer. Larger investment ‘footprints’ are always associated with more predictable returns over time. So, consider divesting into other areas such as commodities, contracts for difference and index-based holdings. These will all provide you with a firm foundation for future success.

Millennials have access to technological innovations that were considered fictional only a decade ago. It therefore makes perfect sense that now is the perfect time to become involved with the financial markets. With planning and prudence, you will be able to secure a sound fiscal future.

 


Categories: Stock Market

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December 4, 2017 A Millennial’s Guide to a Solid Investment Portfolio