5 Insider strategies for building your investment portfolio

Hey savvy savers! Did you know that April is Financial Literacy Month? It's the perfect time to take control and start making your money work for you. 

If you've got some disposable income, investing is one of the best choices to secure a financially successful future. And if you're feeling a little insecure or simply need some guidance, don't forget that our team of experts at Velocity Club are standing by to help guide you on your investment journey.

You don't have to be a millionaire to start investing!

In this article, we'll share 5 insider strategies to build your investment portfolio like a pro. So, grab a coffee and let's dive in!

1. Start with a plan, budget, and the right mindset

The first step in building a successful investment portfolio is a solid plan. This includes setting clear financial goals, creating a budget, and adopting the right mindset. 

An organised budget will help you identify how much money you can allocate towards investments. A goal-oriented mindset will keep you focused on achieving long-term financial success.

Start by outlining your financial goals, both short-term and long-term. 

• Are you saving for a new car, a dream holiday, or your child's education? 
• Perhaps you're focused on building a solid retirement savings portfolio. 

Remember, Rome wasn't built in a day, nor will your investment portfolio be built overnight. To get there, it's important to be patient and consistent and maintain a long-term perspective. One of the most important ingredients of a successful investment portfolio is Time.

We can help with that. Book a free consultation with Velocity Club's Money Coaches today, and we'll guide you on the first steps to building your own investment portfolio.

2. Choose the right investment    products for your goals and needs

 A wide array of investment products are available, each with its unique characteristics, features, and tax treatment. To build a strong portfolio, you must choose the right mix of investments that suit your goals, risk tolerance, and financial needs.

Here are a few examples:

2.1. Saving for a short-term goal like an overseas holiday

• You may want to consider more conservative investments like bonds or money market funds with a bank as an example.
• These investments generally offer lower returns but are considered safer and less volatile. 

2.2. Investing for retirement

• You might lean towards local or international equities/stocks that offer higher potential returns over the long term.
• These represent partial ownership in a company and can provide capital appreciation and dividend income.

DON'T FORGET to take advantage of tax-free investment accounts and tax breaks offered by retirement annuity products. These can be a great way to reduce your tax burden while building your financial future.

And if all of this seems a bit intimidating, then please don't be shy to book a free consultation with our Money Coaches - they're here to help you make the best financial decisions for your needs and personal goals. They can help you understand the ins and outs of different investment products and select the right mix to achieve your financial goals.

3. Diversify your investment across    asset classes and sectors

This tip is all about managing risk through diversification.

As the old saying goes, "Don't put all your eggs in one basket." Diversifying your investments across different asset classes and sectors helps to spread risk and enhance potential returns. 

In addition to asset class diversification, it's also important to diversify within each asset class. 

For example, consider spreading your investments across different industries, sectors, and geographical locations when investing in stocks. This will further help to minimise risk and maximise potential returns.

Remember to align your investment strategy with your risk tolerance, risk appetite, financial goals, and investment time horizon. It's all about finding the right balance that works for you. But also, remember that your risk tolerance and investment objectives may change over time, so it's super important to reassess and adjust your strategy every so often. 

 If you need help with aligning your own investment strategy with your life circumstances, book a free consultation with a Velocity Club Money Coach today, and we'll help you assess your financial needs.

4. Discipline and the importance of    staying the course

 Investing is about playing the long game. It's a marathon, not a sprint. Therefore, it's crucial to maintain discipline and avoid making impulsive decisions based on short-term market movements. 

Stick to your plan; don't let emotions drive your investment choices. The important thing to keep in mind is that market fluctuations are inevitable, but historically, markets have trended upward over the long term.

A relationship with a Velocity Club Money Coach will give you an accountability partner to lean on when you're struggling to stay the course. Book a free consultation today to start your investment journey with a partner you can trust.

One key strategy for long-term success is reinvesting dividends. Doing so will harness the power of compounding returns, which can significantly boost your portfolio's growth over time. 

Another important aspect of discipline is regularly and consistently contributing to your investments. Consider setting up automatic transfers/payments into your investment accounts to ensure you continually add to your portfolio, even during periods of market turbulence. 

This approach, known as cost averaging, can help you avoid the pitfalls of market timing and potentially lower your average cost per share.

5. Review and balance your portfolio with a trusted adviser

Regularly reviewing and rebalancing your portfolio is essential to ensure it stays aligned with your goals, risk tolerance, and investment strategy. As markets change and your financial situation evolves, you may need to adjust your portfolio to maintain the right balance of risk and reward.

Rebalancing your portfolio typically involves adjusting your asset allocation to align with your original investment plan. 

For example, if your stock investments have performed particularly well, they may now represent a larger percentage of your portfolio than initially planned. In this case, you would sell some of your stocks and use the proceeds to purchase other assets to restore your desired asset allocation.

At Velocity Club, our team of professionals understands the South African context and market. We're committed to helping our clients thrive by offering personalised financial advice and support throughout their investment journey.

By partnering with us, you'll have access to our wealth of knowledge and expertise and a trusted financial adviser who truly understands your unique needs and goals.

Embrace the power of investment

This Financial Literacy Month, take the first step towards building your investment portfolio and securing a brighter financial future by booking a free consultation with a Velocity Club Money Coach right now. 

Our team is ready and eager to help you navigate the world of investments and guide you towards success. Book a session, and let's start building your wealth together!