Three Steps to Starting a Successful Investment Portfolio

Investing is not the speedy, golden ticket many would have you believe. A successful portfolio takes time, energy, and money to craft. When getting started, it can seem confusing and disorientating. If you don’t understand what you are doing, then you could throw your money away.


Luckily, it is easy to break down the steps to begin. Below, we give three steps to developing a successful investment portfolio.

Know Your Goals.

The first step is to know what your investment goals are. Someone in their twenties who is investing for retirement will have different goals from someone who is planning on investing for short-term gain. If you know your aim, it helps to manage your portfolio and make decisions on how it operates.

One of the first major thoughts is to determine how much risk you want to take. You can generally group investors into conservative or aggressive types. Conservative investors stand to lose less but also have less chance of making as much financial gain.

They will concentrate on fixed assets and income securities. However, an aggressive portfolio will include a higher percentage of equities. Of course, you don’t have to go wholeheartedly with one or the other. You may decide to approach a middle ground.

Choose the Right Platform for Your Needs

Once you know the level of risk you want to take, you can think about getting the right broker. Part of this involves deciding how much help you want. If you are looking to earn some passive investment and be hands-off, then you should consider one that has automated processes. Many UK Forex Brokers have world-class trading tools available, which websites like Investing Reviews rank them on. If you are willing to take high levels of risk, you can also find many here that have CFD trading options there.

Another consideration is to look at the fees used on a platform. If you plan to invest rarely, you don’t want to be paying high monthly fees to use a broker. Conversely, regular traders don’t want high transaction fees for every investment they make.

Think About Your Desired Asset Type

There are several different assets you can choose to invest in. All have different levels of risk and reward.

Stocks themselves each have different risk levels depending on market cap and sector. The right platform will help you analyse this if it has quality tools to hand. Choosing them yourself takes a lot of work, as you should do some research into the sector and financial background of the company before investing.

Bonds are one of the safest forms of investment, though they will produce a lower yield. They will be dictated by the interest rate, along with bond type and maturity.

Mutual funds and Exchange Traded Funds (ETFs) are an alternative way to invest if you want a low-risk and hands-off approach. A fund manager, who decides which are the best options based on their research runs a mutual fund. An Exchange Traded Fund is similar, but they get traded like stocks. Each one represents a large group of stocks gathered by a certain factor, such as sector or country.

So as long as you build your portfolio with research and clear goals, you should have everything in place to confidently dive into the world of investments.