Creating a strong investment portfolio starts with saving as much money as you can and investing it as wisely as you can, but there is a lot more to improving your investment returns than that. Especially in today’s volatile market where may of us saw our investments down 10, 20 or even 30%, it’s important to take a healthy look at your investments to make sure your money is always working as hard as it can for you!

Below, you will find some of the best ways to improve your returns and ensure that your investments are really working for you right now:

1. Lower your expenses

A strategy that many investors do not use enough is lowering how much it costs them to invest in the first place but this is actually a really good way to maximize your returns. If you can lower your investment fees by as little as one percent, then assuming your return on investment is ten percent, you could make 9,000 dollars on a $100,000 investment instead of the $80,000 you would earn paying two percent in fees. The expense fee can easily be found by looking at the details of your mutual fund / index fund; my rule of thumb is <1% fees, ideally more like <0.5% in fees. If you’re trading individual stocks be aware of transaction fees for doing so, but thankfully many brokerages these days don’t charge any fee to trade. A good first place to look to improve your return is to lower your expenses!

2. Diversify

Diversifying your portfolio helps to make your investments safer, but it can also help to improve returns on investment too, Platforms like M&R Capital Management, make diversifying your portfolio as simple as can be, and as long as you choose a number of different options with different investment and return rates, you will be giving yourself the best chance of success. Keeping your eggs in several baskets vs fewer can help boost your overall average return.

One easy way that I diversify is through an index fund. An index fund is a type of mutual funds but focused on a broader investment strategy (the total market in my case) and with lower fees.

3. Invest in a tax-efficient way

If you are not already taking advantage of tax-efficient investing that is something you should definitely change if you want to increase your ROI. There are a number of ways you can do this from avoiding heavy trading which comes with the burden of capital gains taxes, and to instead focus on ETFs, real estate, and perhaps even investing in your retirement, all of which come with lower tax burdens, and even tax breaks, in many cases. You can also look at tax harvesting which involves selling some winner in addition to some losers to help net out your tax liability. Not sure what to invest in to boost tax efficiency? Talk to a professional financial adviser before you invest.

4. Don’t let the market halt your activities

One mistake a lot of people make is to stop investing altogether when the market experiences a dip. This is not a good idea because it means you are losing out on valuable months and years where you could be building your portfolio and earning money, and it is still possible to make money when times are tough. Dollar Cost Average! I keep most of my investment strategy on autopilot – investing the same amount each month. None of us have a crystal ball so I don’t try to predict or call the bottoms or the peaks, I just keep steadily investing! You need to get into the mindset of thinking long-term and work with your financial adviser to identify the safest investment options at that time, because there will always be some even if things do seem rougher than usual.

Summary

As you can see, there are a number of fairly simple things you can do to improve your investment returns at any time and although you do not need to do all of them right now, start investigating your options, put into motion as many of the above strategies as you feel comfortable with, and you will see an improvement in your fortunes for sure.

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