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  • Investment

3 Investment Management Strategies That Work

  • December 2, 2020
  • News Lo

Table of Contents

    • 1. Dollar-Cost Averaging Investment Management Approach
    • 2. Net Unrealized Appreciation Approach
    • 3. Index Tracking Strategy
  • How We Can Help

As you embark on the road to investing, one thing keeps you feeling a sense of relief: Investing strategies are relatively flexible. But there’s a catch: if you constantly change course, this may cause you to incur hefty purchase fees over time.

On top of this, selling assets creates taxable capital gains. And that can get expensive.

For this reason, it’s critical that you have the right investment management strategies in place before you start investing.

Here’s a rundown on the best strategies for guaranteeing long-term financial success.

1. Dollar-Cost Averaging Investment Management Approach

A common mistake that many new investors make is to trade when they believe that the time is right.

Rather than following this approach, consider using the dollar-cost averaging, or DCA, strategy. Based on this strategy, you should invest a certain amount of money at predetermined time intervals.

By following this strategy, you’ll buy fewer shares when the prices are higher, and you’ll buy more when the prices are lower.

The benefit of this strategy is that you can start investing your money sooner, rather than trying to wait until prices have dropped. The strategy is an excellent way to generate divided returns on your investment.

2. Net Unrealized Appreciation Approach

This is another investment strategy that can help you to lower your tax rate when you take a lump sum distribution from your 401(k) or another plan sponsored by an employer.

This strategy of financial planning from Bogart Wealth really works if you are in a higher tax bracket. It is also great for anyone with stocks that are highly appreciated. Either way, with this approach, you can save a significant amount of money.

Note that a distribution might quality for net unrealized appreciation only after you have undergone a certain type of triggering event. This event may include turning 59.5 years of age or becoming disabled, for example.

3. Index Tracking Strategy

Yet another way to boost your bottom line is to track index funds.

If you invest in a fund that mostly tracks index funds, you can take advantage of the lower fees that are usually associated with index funds. Likewise, you can benefit from these funds’ long-term financial gains.

As a whole, index funds typically outperform funds that are actively managed and have higher fees, so incorporate them into your investment strategy arsenal.

Remember, always concentrate on what you will take home after factoring in taxes and fees. Don’t just look at price returns only, as this can lead to lower results than anticipated.

How We Can Help

In addition to highlighting the best investment management strategies, we offer a wide variety of other invaluable financial tips.

For instance, through our site, you can learn which mistakes to avoid when using store credit cards. You can also learn about how to finally alleviate your debt using the snowballing method.

Take a peek at our site to learn more about how to increase your net worth and, in turn, your quality of life long term.

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