Careful Financial Navigation in 2021.

1. Draw a personal financial roadmap.

Before you make any investing decision, sit down and take an honest look at your entire financial situation -- especially if you’ve never made a financial plan before. 

The first step to successful investing is figuring out your goals and risk tolerance – either on your own or with the help of a financial professional.  There is no guarantee that you’ll make money from your investments. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.

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2. Evaluate your comfort zone in taking on risk.

All investments involve some degree of risk. If you intend to purchase securities - such as stocks, bonds, or mutual funds - it's important that you understand before you invest that you could lose some or all of your money.  Unlike deposits at FDIC-insured banks and NCUA-insured credit unions, the money you invest in securities typically is not federally insured.  You could lose your principal, which is the amount you've invested.  That’s true even if you purchase your investments through a bank.

The reward for taking on risk is the potential for a greater investment return. 

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3. Consider an appropriate mix of investments.

By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses.  Historically, the returns of the three major asset categories – stocks, bonds, and cash – have not moved up and down at the same time.  Market conditions that cause one asset category to do well often cause another asset category to have average or poor returns.  By investing in more than one asset category, you'll reduce the risk that you'll lose money and your portfolio's overall investment returns will have a smoother ride.  If one asset category's investment return falls, you'll be in a position to counteract your losses in that asset category with better investment returns in another asset category.

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4. Be careful if investing in any individual stock.

One of the most important ways to lessen the risks of investing is to diversify your investments. It’s common sense: don't put all your eggs in one basket.  By picking the right group of investments within an asset category, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain. 

You’ll be exposed to significant investment risk if you invest heavily in shares of your employer’s stock or any individual stock.  If that stock does poorly or the company goes bankrupt, you’ll probably lose a lot of money (and perhaps your job). 

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5. Create and maintain an emergency fund.

Most smart investors put enough money in a savings product to cover an emergency, like sudden unemployment.  Some make sure they have up to six months of their income in savings so that they know it will absolutely be there for them when they need it.

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6. Pay off high interest credit card debt.

There is no investment strategy anywhere that pays off as well as, or with less risk than, merely paying off all high interest debt you may have. If you owe money on high interest credit cards, the wisest thing you can do under any market conditions is to pay off the balance in full as quickly as possible. 

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7. Consider dollar cost averaging.

Through the investment strategy known as “dollar cost averaging,” you can protect yourself from the risk of investing all of your money at the wrong time by following a consistent pattern of adding new money to your investment over a long period of time.  By making regular investments with the same amount of money each time, you will buy more of an investment when its price is low and less of the investment when its price is high.  Individuals that typically make a lump-sum contribution to an individual retirement account either at the end of the calendar year or in early April may want to consider “dollar cost averaging” as an investment strategy, especially in a volatile market. 

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8. Take advantage "free money" from your employer.

In many employer-sponsored retirement plans, the employer will match some or all of your contributions.  If your employer offers a retirement plan and you do not contribute enough to get your employer’s maximum match, you are passing up “free money” for your retirement savings.

Keep Your Money Working -- In most cases, a workplace plan is the most effective way to save for retirement.  Consider your options carefully before borrowing from your retirement plan.  In particular, avoid using a 401(k) debit card, except as a last resort.  Money you borrow now will reduce the savings vailable to grow over the years and ultimately what you have when you retire.  Also, if you don’t repay the loan, you may pay federal income taxes and penalties.

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9. Consider rebalancing your portfolio occasionally.

Rebalancing is bringing your portfolio back to your original asset allocation mix.  By rebalancing, you'll ensure that your portfolio does not overemphasize one or more asset category.

Stick with Your Plan: Buy Low, Sell High -- Shifting money away from an asset category when it is doing well in favor an asset category that is doing poorly may not be easy, but it can be a wise move.  By cutting back on the current "winners" and adding more of the current so-called "losers," rebalancing forces you to buy low and sell high.

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10. Avoid circumstances that can lead to fraud.

Scam artists read the headlines, too.  Often, they’ll use a highly publicized news item to lure potential investors and make their “opportunity” sound more legitimate.  The SEC recommends that you ask questions and check out the answers with an unbiased source before you invest.  Always take your time and talk to trusted friends and family members before investing.

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11. Take the next step.

Today, just about anyone that is interested in Forex or (Nadex) Binary Options, or quite frankly trading in general, should consider it a point to buy a membership to (BOTS) strategy development room. Regardless of your experience level, you can now join in and begin learning from other amazing members. The whole point of this service is to try and connect like minded individuals together to form a collective of ideas to try and help everyone improve. Anyone who has traded for nearly any period of time knows trading is HARD, VERY HARD. It takes time to develop strategies and try and learn how to control risk. We try and help by offering a community in which members can share their experiences and what they are working on to decrease the time to learn these valuable lessons.

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