Investing takes time and energy – that is no secret. But, most of us are also busy with other elements of our daily lives. It is no surprise, then, that for many new investors, the amount of time and energy needed to formulate an investment plan and regularly adhere to that plan can seem extremely overwhelming. In fact, this lack of ability to allocate time to investing is one of the primary reasons why many people choose not to invest in the first place.
But, don’t let this scare you! One thing that new investors often learn is that we can make this necessary time commitment easier on ourselves by simply scheduling out our goals and automating our own good behaviors. To that end, here are three of the best ways to get started in scheduling your investment career:
1. Set a Timeline for Your Investment Goals
To set yourself out on a solid path for your investing future, it is important to make concrete goals for what you’re really trying to accomplish. For example, if you have a more long-term horizon for your investments, you will likely take riskier investments – such as riskier stocks or a more stock-heavy portfolio mix. If you have less time to achieve your investment goals – such as the need to buy a new car in several years, for example – you might want to make investments that are slightly less risky, like investing in mutual funds instead of choosing only a handful of stocks. Whatever your investment goals may be, you want to plan accordingly from the beginning to set your portfolio out on the right track. By setting your goals early, with a timeline for when you want to have them achieved by, your regular work towards meeting these goals will also be more directed and effective.
2. Automatically Invest with Every Pay Check
In order to really build your investment portfolio, it is important to invest often. But, instead of trying to remember to add money to your investment account every month, set up an account so that you can invest automatically with every paycheck you receive. This will reduce the amount of time you need to spend allocating to your portfolio each month, while continually allowing your investments to grow! Further, by automatically allocating some money each month, you will not fall victim to forgetting to invest or spending your money on other things before you invest it!
3. Schedule Portfolio Rebalancing
Finally, one extremely useful tip for all new investors is to set calendar alerts or make reminders to rebalance your portfolio periodically. Remember that timeline you created for yourself when you first began to invest? It likely came along with a desired balance for your investments – including percentages of your portfolio that you’d like to allocate to stocks, bonds, and other kinds of investments. Of course, if you hadn’t planned this out in advance, it’s never too late! You can still create a desired balance and try to stick to it going forward. However, any time you create such a balance, it will be necessary to reset your investments back to their original allocations after they’ve grown for a period of time. For example, if you allocated 75% of your portfolio to stocks originally and your stocks have grown a lot over the past year, they might be worth 80% of your portfolio now. So, to rebalance, you would sell shares of your equities to get yourself back to your desired 75% allocation. Taking these steps will help your portfolio to stay in line with your risk preferences and reach your target goals more simply. However, some investors forget to do this regularly. So, to help you remember your periodic rebalancing, it might be helpful to schedule times in advance!
By taking these three scheduling steps, you can help yourself to stay on track with your investment goals without having to take as much time to think about your portfolio regularly. Of course, it is always good to check in with your investments, but for busier investors, saving a little time can be a really great thing!