Investing Your Tax Return Is A Great Way To Jump Start Your Portfolio

| April 15, 2015 | 0 Comments

tax returnIt’s tax season…

For most of us, that means you’ll be receiving a tax refund from Uncle Sam.  In fact, the average tax refund is $2,800.

One way to grow your tax refund is by investing it.  Even investing half of your refund check can help jump start your investment portfolio.

There are lots of places for you to invest your money.  Investing in large cap US stocks is a great place to start.

Consider this, if you had invested $1,400 in the SPDR S&P 500 ETF $SPY five years ago, your money would have more than doubled if you had reinvested dividends.

5-year performance of SPY

Needless to say, investing is a great way to put your tax refund to work.

Investing your tax return in ETFs

If you’re new to investing, one of the things you’ll want to avoid is investing all of your money in one place.  Never invest all of your money in one stock.

You want to diversify your investments.  And ETFs are a simply way for investors to diversify their investments.

Things to consider before investing your tax return

Before you invest your tax return, you’ll need to do some research.

One tool that’s essential to every ETF investor is an ETF screener.

You can use an ETF screener to develop an ETF list.

These tools will help you find an ETF that fits your investment goals.

The key to successfully investing your tax return

Research and buying an ETF is an important part of a successful investment.  But it’s not the most important.

The key to success with any investment is time.

That’s right, your investment isn’t going to double overnight.  You need to be patient and let time work for you.  Don’t forget, it took an investment in SPY five years to double.

And it didn’t go straight up.  There were dips along the way.

Don’t let market volatility scare you into selling your ETF.  You are much better off holding onto your investments over a longer period of time.

But a simple buy and hold strategy isn’t always the best way to invest.  You can be an active investor even if you don’t have a lot of money to invest.

The thing to remember is, you need a system to trade ETFs.

You can’t let your buy and sell decision be controlled by your emotions.  Fear and greed are powerful emotions that investors must overcome in order to be successful.

Selling because you are afraid your investment will go down or holding on too long hoping it will continue to go up are sure fire ways to screw up your investments.

Good Investing,

Corey Williams

Note: Corey Williams writes and edits ETFTradingResearch.com.   Sign up for our free ETF reports and free e-letter at http://www.etftradingresearch.com/free-sign-up. We’re devoted to helping you make more money from ETFs.

Tags: , ,

Category: What's Going On?

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets three times a week. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

Leave a Reply

Your email address will not be published.