When you are active in investing, you aim for the growth of your portfolio. This is possible in numerous ways. Typical examples are growth through dividends and stock appreciation. If you are active in crypto, you typically also enjoy growth through staking and participation in consensus mechanisms. Nonetheless, you need to have a strong strategy to set up your portfolio for growth. In this article, we will give recommendations for setting up your portfolio for growth as well as the technology you can equip to make it happen.
Set-up your objectives
The first strategic element you need to decide upon is the reason why you invest. Are you saving up for retirement? Want to grow your portfolio to pay for your kid’s college? These are all possible reasons to invest. With these objectives come horizons. For example, your kid’s college can be ten years away, whereas retirement can still take over 20 years.
Determine your risk appetite
Based on these objectives, you can start to determine your risk profile. You could take a riskier approach for the objective that is short-term with minimal impact. On the other hand, you might take a safer approach when it comes to your kid’s college funds. By determining the risk appetite, you can select the suitable investment types.
Selecting the assets you want to invest in
You can group your investments according to the objectives and risk portfolio. To determine the assets you want to invest in, you need to conduct research. For long-term portfolios, it helps to have a diversified portfolio. If you want to play it safe, you can invest in broad index funds such as the S&P 500 and the MSCi World index fund. If you have confidence in individual stocks, you can also select those to optimize your dividend return.
Technology to support your strategy
There are many helpful technologies out there you can leverage. A common way to create an overview of your portfolio is the spreadsheet. Nowadays it also allows you to gain insight through real-time stock prices that you can retrieve through functions. However, it is still a suboptimal solution. Things like transactions and dividends are not automatically reflected and require to be entered manually. This is where a portfolio tracker comes into play.
Real-time data availability
In the tracker, you have real-time availability of stock prices as well as market news. You can integrate your brokers and your transactions will be automatically reflected in the application. This limits your efforts to keep your portfolio up to date. You can also create clusters of stocks in so-called portfolios. This can be aligned to the objectives you have set and enables you to track your goals accordingly.
Dedicated crypto portfolio tracker
When you want to focus on crypto, there are also dedicated crypto portfolio tracker applications available. These applications allow you to have a holistic overview of your holdings across wallets. This is beneficial, as you integrate them through the use of the Public Key. No personal or confidential information is shared, meaning you do not compromise on security.
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