Investing Tips for Millennials (and Experienced Predecessors)

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A contributor to Inc.com recently reported on his journey to seek out wise investing advice for the novice millennial investor. Predictably, most of the pointers he reported could resonate for savvy investors of any age – save money strategically, diversify your portfolio, don’t invest in things you don’t understand.

However, missing from this piece was an increasingly relevant factor that may influence a millennial’s investment decisions: how potential changes in social security could influence how millennials plan for retirement. Diversity in a retirement portfolio and independence from social security may be more critical for millennials than any generation before it.

Below are four timeless investing strategies, tweaked slightly to make sense for the current generation of young and novice investors. The fifth strategy is specific to millennials as they potentially face a new retirement horizon.

Save, Regardless of income
Inc.com contributor, Nicholas Cole, said investors shouldn’t wait until they’re making more money before they start saving. Upon receiving a raise or pay bump, most people quickly adjust to spending more money than they did before, rather than saving more money like they had planned. Regardless of income, Cole said, investors should try to start saving young to get into the habit.

Diversify Your Portfolio
Jonathan Rose, CEO of Capital Gold Group, said diversification is key to a well-rounded portfolio:
"Having some tangible assets in your portfolio to act as a hedge is critical in today's economy. With terrorism, market bubbles, and inflation, it is critical to keep at least 25% of your portfolio in precious metals. For millennials in particular, as a generation laden with student debt, it's a smart move to invest in a safe haven asset, such as gold, that can be counted on as a store of value."
Self-directed IRAs can be invested in precious metals, real estate, private loans, and more. As the fastest growing sector of the retirement industry, millennials may benefit more than any other generation from the diversity that self-directed IRAs provide.

Don’t Invest in What you Don’t Understand
“Don’t day trade if you’re not a day trader” was another one of Cole's pointers. Investing in long-term stocks is a completely separate animal from trying to time the stock market. If a new investor is not a knowledgeable or experienced day trader, they may want to invest in companies they have researched thoroughly and believe in, with the intention of holding onto their trades for a long stretch of time.

Don’t Gamble What You Can’t Afford to Lose
Cole concluded by advising for investors to not put all their eggs in one basket, aka don’t dump their entire savings into one stock. This is especially true for young investors, who may not be in a financial situation to recover easily if the investment goes south.
Instead, Cole encouraged young investors’ riskier investments to be those that won’t break their bank if the investment tanks. This sentiment rings true for investors of any age!

Stay Aware of Changes in Policy
The new Republican cabinet’s changes to social security could include the party’s past proposals to curtail dwindling social security funding. These proposals may include increasing the retirement age, limiting benefits to wealthier Americans via means testing, and changing the way benefits are calculated.

The tentative future of social security may encourage millennials to try and secure funding for their retirement through alternate routes. As stated above, diversity in a retirement portfolio can help offset whatever decrease retirees may be facing with social security moving forward.

Self-directed IRAs are a powerful way for investors to free themselves from the ups and downs of the stock market and the tentative future of social security. Real estate, precious metals, and private equity are all viable investments for self-directed IRAs. Though most millennials may be young or novice investors, they have plenty of time to build their knowledge and experience with a certain asset market, and use that experience to the benefit of their retirement portfolio.
 

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