In the fast paced world of investing, it can be easy to get caught up in the latest trends and fads. However, savvy investors know that it's not always about chasing the hottest stocks or jumping on the latest bandwagon. Instead, they focus on using their ingenuity to outmaneuver the market and avoid common pitfalls.
One key way to do this is by keeping fees low. While it may not seem like a big deal, high fees can eat away at your returns over time. By using lower fees, investors can keep more of their money working for them and less going towards expenses.
But how exactly can investors use lower fees to outmaneuver the market? Here are a few tips to get started:
1. Choose low cost index funds or ETFs: Index funds and exchange traded funds (ETFs) are a great way to diversify your portfolio while keeping costs low. These funds typically have lower fees compared to actively managed funds, which can help boost your overall returns.
2. Consider robo advisors: Robo advisors are automated investing platforms that use algorithms to create and manage your portfolio. Because they don't require human intervention, robo advisors can offer lower fees compared to traditional financial advisors.
3. Avoid unnecessary trading: One of the biggest pitfalls for investors is excessive trading. Not only does this increase fees, but it can also lead to poor decision making and emotional investing. By sticking to a long term investment strategy and avoiding unnecessary trades, investors can keep costs down and stay focused on their goals.
By using their ingenuity and focusing on keeping fees low, investors can outmaneuver the market and set themselves up for long term success. So next time you're tempted to chase the latest trend, remember that sometimes the simplest strategies can be the most effective.