Did you know that how you choose to invest, i.e.  (your investor behaviour) is influenced by your level of financial literacy?

Knowing how to best maximise your finances is understanding how you can make your money work for you. Unless you are a portfolio manager or someone who works in finance, you will need help in finding ways to make your money work for you without placing a strain on your current finances. Here is what you need to know.

Start sharpening your financial knowledge

Your investment decisions will be influenced by how you see money. Your money personality can be something that plays to your strength, but it could also lead to you bleeding financially. Therefore, sharpening your financial literacy skills, especially in areas where you know your financial skills will need help with is vital. Brush up on investment concepts that will affect your financial goals in the long run. In the end, you want to aim to learn more about how you can grow your finances without working too hard to do so.

Find the best growth portfolio

When it comes to finance management, boosting your financial education will be one of the most important things you can do, especially when it comes to saving and investing. With so many options such as stocks, bonds, unit trusts, trust funds, and exchange trade funds (ETF) it can get overwhelming when you start on your own. Having a professional investment portfolio manager or a financial advisor can ease the strain of finding something that works for your finances and will help boost it. Finding the best portfolio that works for your finances will be the best thing that you can do for yourself as you continue your journey to learn more.

Mind the interest

A common mistake is to always watch how the market in which you choose to invest in is doing. But the reality is, is that the market fluctuates, which can cause you to panic and sell something that could be beneficial if you just give it time. While it is important to keep your eyes and ears open to what is happening within the markets, it is equally as important to keep your eyes on how the business or company you choose to partner with is doing.

A business or company that continues to experience stable growth, even when the market is not doing so well, means that your investment is protected. Focus on the interest rate that comes with the investment product you are interested in. Is it high enough to see you receive a good return? Will it be able to keep up with inflation? Are the terms and conditions in line with the vision you hope to achieve with your funds?

Diversify

Diversify is a phrase you will hear frequently. However, upskilling your financial literacy skills to boost your investment behaviour will help you know when it is the right time to diversify and what will be the best way to go about it. A common mistake is to diversify too soon. Instead, focus on seeing growth and returns with your first investment and then gradually work towards taking on more investments that will come with further amounts of risk for you to take on.