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Three things to remember when your investment makes money

POSTED ON NOVEMBER 26, 2021    

It’s always a great feeling when you check your investment and see growth. Even if the amount isn’t that big yet, there’s a certain sense of satisfaction you get when you’ve made a profit.

 

But when that fortunate time happens, remember these 3 things.

 

Don’t take your money out

Unless you’ve reached your time horizon, you should resist the temptation to pull your returns out.

 

After all, the more money you have invested, the higher your chances of reaching your money goal. This is the principle of compound interest, because you may earn from your profit as well as your original investment.

 

For best results, keep your returns and principal in, and consistently add money. Doing these 2 things can greatly increase your probability of future success.

 

Things may change

Volatility is present in all investments to some extent, and so the gains that you see one day may be significantly bigger or smaller when you check on a different day.


This isn’t really something to be very worried about, as long as the total value keeps going up. Given enough time, you’re still likely to be able to reach your money goal (but if you want to know what to do if your investment’s value goes down, you can read this article).

 

Choose your next step

Once you’ve achieved your goal, you can go ahead and pull your money out so you can use it for the purpose you invested it for.

 

Remember though that if you still have time to spare before you actually need the money, you might still be able to grow the value by staying invested with both your original amount and all the profit it has earned.

 

You can also consider shifting to a different investment vehicle (possibly something with a lower risk suitability) altogether, especially if you’re less willing to expose your investment and profit to risk at that point.

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