Your best three investments for 2019
How are you getting on with your new year’s resolutions, we’re a few weeks in now and for many of you, your resolutions include financial goal-setting.
It’s also the time of year when we are hit with all sorts of predictions on what stocks or investment strategies are going to work best in the coming year, so I thought I would add mine to your list.
You may be paying extra attention right now, given that the stock market was so rocky in 2018 and we are heading for the uncertain Brexit.
I know volatility can make you nervous, seeing your pension or ISA fall for no reason can be concerning, however, please, take a deep breath and ignore all the stock and other investing tips you hear and read. The best investment advice for the coming year, and for your life for that matter, has nothing to do with what may–or may not–happen in the economy and the markets. Nobody can say for sure exactly how things will play out, we should know that by watching our politicians on TV.
My best investment advice for 2019 is advice that will build financial security not just for a year, but for life:
Invest in the Right Perspective
If you are investing for retirement, and you have 10, 20, 30 or more years until you retire, what happens in 2019 isn’t too important. Sticking to your long-term plan is what matters. In fact, when you are younger and you’re saving monthly into your pension, it’s actually good for shares to lose value, honestly.
It means your contributions in your workplace pension or ISAs will buy more shares because they are cheaper and over time remember, you have decades, those shares should rise in value, especially if you invest via a global index tracker fund,
If you are approaching your retirement years, you obviously want to be comfortable with your portfolio’s mix of shares, bonds, and cash. Review your strategy to make sure it is one that feels right to you. Your workplace pension plan may offer online tools to help you sort through your portfolio allocation, but again, perspective is important, your retirement may last two or three decades and if you intend not to buy an annuity, it means you will remain invested and your portfolio has plenty of time to grow in the coming years.
Commit to living within your means
If you are looking for a financial goal, this is the big one as far as I am concerned, it’s not what you earn that counts, it’s what you do with what you earn and it’s essential you avoid credit card debt. I hate budgets, I think they are like calorie restrictive diets, that’s why I developed the Wednesday WAM – your weekly allowance to cover your everyday spending items.
If you have unsecured debt like credit cards and overdrafts ensure you tackling these using my snowball debt repayment system.
We have been through a 10 year stock market run, a bull market, where the economy is good and business is strong, let’s call the season ‘summer’, and well all know what follows summer, and when the economy slows down, when things get a little rocky, you want to have your financial house in order and now’s the best time to focus on clearing your debts before winter comes.
If you have credit card debt, ensure you’re switching the balances to get the best interest rate you can, before you see rates rising. Use my Bank Account System which I share in my book The Money Plan, to organise your spending and get yourself financially in control.
Take Care of Yourself
Investing in your physical and emotional well-being is the smartest move you will ever make. Emotional stress and mental health is finally becoming mainstream news, January and February are difficult months for some people, the weather is cold and dark, we realise how much we’ve over spent at Christmas as our statements arrive and life is difficult. Reach out and get some help, talk to someone and take care of yourself first. Taking care of yourself is the most selfless priority you can have. It is what gives you the strength and the energy to be there for everyone in your life.
When you take the time to take care of yourself you are investing in being a happier, healthier you today, and decades from now.
With all the financial planning we can do, we often lose sight of the fact that arriving at retirement in the best shape possible will have a huge impact on the quality of our retirement. It just might also allow you to work a bit longer–if that is part of your retirement plan–and potentially reduce your chances of early care costs later on.
A healthier you starting in 2019 is going to pay dividends for years.