Investing early in a child’s life is one of the smartest investments you can make. It can help you outpace inflation and create a foundation for long-term support. The compound interest of a smart investment can double your money over time. The earlier you invest, the sooner it will grow.
Smart investments should be part of a diversified portfolio, which helps you minimize risks and generate favorable returns. This is important because you want to protect your money from single-product failures and market volatility. In addition, it is essential to invest early so that you can take advantage of tax-saving opportunities. This strategy also helps you build a corpus in time for your retirement.
Another smart investment strategy involves buying stocks at discounted prices. This can provide a cushion of safety as you wait for the stock’s price to increase. However, it can be difficult to find stocks on sale. You will need patience and perseverance to find these. But if you do find one, you will be able to reap the benefits of its low price and a high return.
Asset diversification means having a diverse portfolio that includes several asset categories with different returns. This will protect your portfolio from substantial losses. Moreover, different asset categories will respond to market conditions differently. This will reduce your portfolio volatility while increasing the overall return potential.