Saagar Gupta on Investing Strategies for Busy Professionals

Many successful individuals prepare for the future by investing their excess cash or setting aside a portion of their paycheck each month. The problem for many people is that they simply don’t have the time to read annual reports, listen to earnings conference calls, follow financial markets or do the other little things that lead to smart investing decisions.

However, there are effective strategies to invest money in a prudent manner without spending a lot of time doing so. Over the past few years, many new and exciting investing tools have become widely available to the general public.

On-the-Job Investing
A busy person is in luck if their employer offers a 401(k) or other retirement plan. This is an opportunity to build a substantial investment portfolio with little time and effort. There are tax benefits, and employers often match funds.

Some retirement plans are managed, meaning investors don’t have to spend time making investment decisions. Other plans offer the chance to choose investment options. This can require some time when an employee first enrolls in a 401(k), but after that she can do well just by occasionally reviewing the portfolio and making adjustments. Typically, it is safest to stay in broad market mutual funds or ETFs rather than pick individual stocks if you do not have the time to research thoroughly.

Buy and Hold
Long-term investing is by far the best option for the average investor, especially when he or she is too busy to devote much time to a portfolio. Short-term investing requires more frequent attention and trading, along with higher risk. For those without time to spare, smart investing for the long-term could be a better option.

Mutual Funds and ETFs
Mutual funds and ETFs (Exchange Traded Funds) are a great option for people who are too busy to research individual stock investments. With mutual funds, you participate by purchasing shares of a portfolio that's run by a professional fund manager.

Automated Investing
The simplest way to participate in automated investing is to have money automatically deducted from a bank account each month. For convenience, most brokers and mutual funds offer managed investment plans that feature the service.

Another approach is to use an online app. There are many new investment apps that let an investor create a profile based on his investing goals and preferences. The app then selects stocks to build a customized portfolio. While these new automated investing strategies make your decisions easier, keep in mind that they are general solutions aimed at a wider audience, and not necessarily customized for your individual needs. Speaking with a trusted financial advisor is the best way to ensure you're investing efficiently, but the apps are a good way to get your feet wet.

Saagar originally discussed this topic through his professional blog at http://saagargupta.net/investi...

Disclaimer: This post is only made available for educational purposes. It is designed to give visitors general information and a general understanding of select financial topics. It is not intended to provide specific financial or investment advice. Conduct your own due diligence or consult a licensed financial advisor/broker before making any and all financial/investment decisions.