Table of Contents
Introduction
The creation of wealth is something that many people want to do but rarely understand the process. But it doesn’t have to be! With the help of some guidelines and resources, it is very much possible to contribute to the attainment of financial freedom. And here comes Ally Invest, a one-stop-shop for different investment products and strategies that can help you grow your money slowly over the years. In this article, we will explore the various strategies that Ally Invest provides and how they can assist you in achieving your financial goals in the future.
What is Ally Invest?
So, what is Ally Invest? It is an online brokerage that provides a connection to a wide range of investment products including common stock, bonds, mutual funds, and exchange traded funds. The good thing is that it is an online platform, which makes it easy to use and suitable for all levels of investors, from new to experienced investors.
This platform is particularly attractive because of its cheap fees. You can get stock and ETF trades for as low as $4.95 per transaction. That means more of your returns stay in your pocket, instead of going to fees that can chip away at your profits.
The importance of diversification for the long term
Another important concept that Ally Invest encourages is diversification. In its simplest form, what does that mean? It means putting your money into different types of investments, across different industries and geographic regions. If you manage to select your portfolio correctly, you can reduce the impact of a loss affecting other parts of your investment portfolio.
Let me give you an example of this. Let’s say there was a investor that only bought one stock. If that stock did badly, the investor would be in a lot of trouble. BUT, if that investor had diversified the assets—if they had put their money into a range of stocks, bonds and ETFs—the effect of a single investment’s poor performance would not have been as severe.
Ally Invest provides a colorful palette of investment choices to help you build that diversification. You can invest in stocks, bonds, mutual funds, and exchange traded funds. Also, they offer a smart robo-advisory service called Ally Invest Managed Portfolios that can design and manage a portfolio that matches your risk appetite and investment goals.
Investing for the Future: The Importance of Compounding Interests
Another strategy that you may want to try with Ally Invest is long-term investing. This means keeping your investments for at least five years to take full advantage of the compounded returns.
So, what is compounding? It is when an investment produces returns, and these returns produce even more returns. In the long run, it means that compounded growth can significantly increase your investment returns.
Let’s look at an example of an investor who invests $10,000 in a stock with an average annual return of 8%. After ten years, that initial investment could be worth approximately $21,589. However, if the investor chose to reinvest the dividends and allow them to compound, the total would be approximately $21,935, or $346 more than just letting it sit!
Ally Invest has a wealth of low-cost index funds and ETFs that are ideal for buy and hold strategy. They also have a number of educational materials and resources that can help you stay on track with your long-term financial plans.
Strategy: Take Advantage of the Small Changes in the Market – Active Trading
On the other hand, if you love the hands-on approach, then you might opt for the short-term trading strategy. It is a approach that involves the purchase and sale of securities with the aim of making profits from the price differences in the market.
Ally Invest is built for the active trader and is packed with features to help traders succeed. They provide real-time market data, technical analysis tools such as charts and screenshots, and the ability to create your own watch list. They also provide different order types to place your orders accurately, including market orders, limit orders, and stop orders.
Just a heads up: active trading can be riskier and more time-consuming than long-term investing. This strategy requires the analyst to keep a close eye on the market and make decisions quickly. If you decide to go this route, you need to have a good understanding of the market and be prepared to lose money at times.
Summary
When it comes to wealth creation, Ally Invest has come up as a one stop destination for all the investment products and services based on the type of investor and his or her investment goals. Whether you want to build a steady portfolio or actively trade in the market, Ally Invest has what it takes to help you achieve your financial goals.
One of the most prudent measures that can be taken is to ensure that the investment portfolio is diversified to reduce the risk of losing money in the event of a poor performance of a particular investment. Ally Invest provides a lot of investment vehicles including stocks, bonds, mutual funds, and ETFs to help you diversify your portfolio. Furthermore, they offer a robo-advisory service that can easily handle the management of a diversified portfolio for you.
For those who are more interested in the long-term investment, there is no better place to look than Ally Invest’s index funds and ETFs. Also, their library of educational content helps you to navigate through the investment world and meet your investment goals.
If you get attracted to the active trading strategy, Ally Invest offers a set of features that will help you with your trading. Note that the active trading strategy is more risky and demands more time than the long-term investing strategy.
In general, Ally Invest is a good platform that can help you on your way to becoming a wealthy person. With the help of the strategies and tools provided, it is possible to start the process of reaching your financial goals.
