Good to Great: How to Scale With an Outsourced CFO

When it comes to learning about the market in 2022, the focus should be on active management versus passive exposure––a financial investment advisor would tell you the same. They would also tell you that there are many truths to learn when understanding how and when to invest, but before you engage in their sound advice, here are ten home truths to get your mind ticking.

 

1. If You Have Credit Card Debt and are Considering Investing, Don't.

Why? Well, can you earn more on your investments than your debts cost you in terms of interest? If your answer is no, you need to think twice before investing, especially with the rate at which today's inflation is increasing. Paying off a high-interest credit card will likely provide a better return on your money than almost any investment.

 

2. Cryptocurrency: Only Invest What You're Prepared to Lose

If you woke up tomorrow and found that Cryptocurrency was deemed null and void, would your financial stability be okay? Cryptocurrency is still a relatively new asset and is inherently risky and, perhaps with today's market, too risky to rank above conventional investments. Because the truth is that without significant history on which to base predictions, any recommendation isn't much more than speculation. 

 

3. Portfolio Asset Allocation: Zero In On Your Goals 

It's a given that a volatile market is bound to impact your investment in one way or another. However, holding a broad range of investments can help lessen any economic or market event's impact on your portfolio. Why? Because different assets gain or lose value at different rates and times, allowing for diversification and risk management. 

 

4. "But they said..." ––Be Careful Who You Listen To.

Relying on a broad range of speculation that distorts the specific outcome that will apply to you––is a quick path to disappointment in today's market. Please, and I say that with financial love, seek out the advice of a financial investment advisor, and don't settle for Joe at the bar's hot tip because you think it's the only way to make a dollar. Instead, opt for a professional that can offer a higher standard of integrity when negotiating today's investment market.

 

5. Don't Fear Inflation. Prepare For It.

Empower yourself to deal with whatever turbulence the market may have in store by boosting cash reserves. Saving for a rainy day means access to funds, whether it be for an emergency or fun, without the need to compromise your investments.

 

7. Learn How to Say No

Align yourself with a financial investment advisor with your portfolio's best interests at heart, not in their pocket. Heed their advice, it's an investment jungle out there and rushing into fast profits or quick tips will see you fed to the wolves.

 

8. It's Not An Exact Science. Markets Fluctuate. 

And 2022 is no different. To a degree, some logic can be applied when investing in the stock market, for example, the adage that you should sell high and buy low. However, assuming that you can time a market isn't always viable, especially if you do not have time to monitor the market daily or even hourly. Avoid market timing and focus on investing in the long run––waiting for the perfect moment to invest generally exceeds the benefit of even ideal timing. 

 

9. Stay Focused on the Bigger Picture

If there is one home truth that you take away, let it be this. In the long term, it's almost always better to invest than not invest. Suppose you are inclined to regret a significant investment that has suffered in the short term due to the nature of the market. Push your focus toward dollar-cost averaging. By continuing to invest the same amount regardless of the market's fluctuations, you can potentially learn to ride the market and work towards removing any associated emotion from the transaction. 

 

10. The Possibilities are Endless If You're Open to Them

Try to think beyond traditional fixed-income allocations by increasing exposure to alternate investment strategies. Although fixed income can offer a steady stream of income with potentially less risk than other alternatives, it can also be made difficult by high minimum investment requirements, high transaction costs and a lack of liquidity. Your financial investment advisor will be your go-to on this one.

 

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The premise that active management versus passive exposure is the way forward in the investment market of 2022 is solid. With over thirty years of experience, Altus is there to offer financial guidance and support to investors as they navigate the investment market.