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10 Investing Tips In Today’s Markets

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Personal financial investment can be a very difficult endeavor that requires a lot of time and education. While there are numerous ways for beginning investors and day traders to dabble in the stock market and learn on the fly, developing sound, profitable strategies can take years.

Having a strong foundation of understanding regarding basic market strategies, however, can be an enormous help early in your career as an investor. Bearing that in mind, I’ve compiled a list of 10 vital tips and strategies from investing experts and financial sources.

Keep It Simple

The importance of keeping it simple in investing is impossible to overstate. Particularly for beginners, the temptation is to swing for the fences, so to speak, and try to land a brilliant bit of stock that will make you rich overnight.

This just isn’t how it works most of the time. A patient, simplified approach focused on sound reasoning is always the likelier to lead to success.

Remember That Investment Is Long-Term

There’s a difference between day trading and investing. While day trading may seem like the more exciting and appealing of the two options, it’s really reserved for people who want to make careers in the stock market. Investing is more of a financial strategy than a day-to-day activity, and while you should monitor things closely, you should also accept that it’s a long-term practice; small gains and losses shouldn’t necessarily affect your actions so much as distant outlook.

Set Your Lower Limits

While it’s important not to overreact to short-term losses, you should also have a lower limit you’re not willing to dip past. If you can predetermine the amount you want to risk and stick to that amount, you can ensure that you won’t grow stubborn with an investment, keeping with it after it becomes financially problematic in the hopes of a turnaround.

Don’t Get Greedy

Just as you should always set lower limits, you should also cap off how much you’re hoping to profit on a given investment. At some point, after all, the point is to cash out and profit. Every investment is different, but a nice general guideline is: don’t get greedy and hold onto an investment too long just because it’s not losing you money.

Play The Business, Not The Stock

If Warren Buffett said it, it must be good advice! “Games are won by players who focus on the playing field – not those whose eyes are glued to the scoreboard.” Basically, this means make your decisions based on the performance and quality of companies and industries you invest in, as opposed to the day-to-day shifts in their stock valuations.

Diversify When Possible

This is one of the most popular tips not just for beginners but for investors in general: diversify your portfolio. Investing in too many stocks in the same industry, or dependent on the same factors for success, leaves you vulnerable. By establishing various branches of your portfolio in different industries, you decrease the likelihood of a net loss.

Invest In Bad Situations

That sounds counter-intuitive, but consider the advice as it was stated by George Soros: “The worse a situation becomes, the less it takes to turn it around, and the bigger the upside.” This doesn’t mean you should simply gamble on poorly performing stocks, but it’s a handy tip to keep in mind. Most drop-offs bottom out at some point, and at that point there’s nowhere to go but up.

Don’t Get Emotional

This is another tip that doesn’t come from a particular expert or source, but rather is almost always listed as advice for beginner investors: emotion can cripple your portfolio. Whether it means you’re being stubborn about losses, latching onto a stock because of your personal interest in the company, etc., emotion can block you from making reasoned, strategic decisions.

Consider A Mutual Fund

If you’re truly uncertain about your own investing acumen, but you want to take advantage of the markets and learn the process, a fund might be the perfect solution. Basically, a mutual fund allows you to benefit from various assets without the responsibility of making your own investment decisions. You simply choose a fund, buy into it alongside other investors, and allow an expert to allocate your collective finances in a portfolio, for a fee. It’s a great way to put your money to work and observe market impact without making decisions on your own just yet.

Never Stop Learning

That may sound like a cliché, but it’s also vitally important. Because the stock market is always growing and changing, and no pattern is guaranteed to repeat, it’s important to analyze each new decision with a fresh perspective; and that means staying educated on the latest strategies and advice.

Several famously successful investors have made the point over the year that the mind is ultimately the most important investment, and this is something we should all remember when making financial decisions.

18 COMMENTS

  1. Financial investments are a tricky business, you constantly have to take risks hoping you’ll earn more money and not lose your initial investment, so your list really comes in handy for beginners!

  2. I would suggest a couple more types. Like: when in doubt, don’t pay fees. Low fee funds, commission-free trading or trade fee-free platforms. And use free, reputable tools that create a balanced portfolio for you-lie FutureAdvisor or WealthFront.

  3. The advice I’ve always taken comes from ‘The Millionaire Fastlane’ it is an incredibly good book that I urge everyone to read if you are looking to becoming an entrepreneur. The author of the book, M. J. DeMarco, said this within the book: “Think about it. Have you ever met a college student who got rich investing in mutual funds or his employer’s 401(k)? How about the guy who bought municipal bonds in 2006 and retired in 2009? I wonder if that guy driving a $1.2-million car can because of his well-balanced portfolio of mutual funds? These people don’t exist because the youthful rich are not leveraging 8% returns but 800%.” In effect his basic premise is that you don’t get money investing in stock markets and it can often be too risky to yield the rewards at low numbers. Instead, DeMarco suggests that investing in stock markets is a way to maintain wealth, but not to build it.

    Just thought that would be an interesting thought to bring up, I look forward to peoples responses.

  4. I don’t know how many people invest in stocks but I never have. When it comes to investing I will have my work cut out for me since I would be starting out with little knowledge on how investing in stocks work. How many times do we view movies and shows where a person invests in something and find themselves rich? Almost as if they found a winning lottery ticket. Obviously that’s not the way it works in real life so it helps to be realistic when investing.

  5. It is critical to have a good education to help you, especially when you are investing money. Math classes, as well as critical thinking skills can help you make the best decisions. Thinking through certain questions may help you decide on what to invest in, or the amount of money. How will this affect my future. Who will this affect? What will I profit? etc.

  6. The mind is the most important investment, I like this statement! Constantly researching the field you invest in (whether it’s Forex or anything else) is of major importance! I’d actually put this one at the top of the list.

  7. Your quote: “Investing is more of a financial strategy than a day-to-day activity, and while you should monitor things closely, you should also accept that it’s a long-term practice; small gains and losses shouldn’t necessarily affect your actions so much as distant outlook.” I also share with Golf Champion Master, Gary Player, “The harder I work, the luckier I get.” I believe wht he’s saying along with successful economic society are able to “strike it big” from personal finance to investment , to stock holding, business enterterpreneur. Bad situations are always opportunites we can learn from to work harder the next time and the many more times over. Hard work nd intelligence will make us and our investments, whether it be with money and or strength, we can really make things happen and turn things around in our favor and for our families, and for others who need our quality goods and services.

    Thanks for your hard work in imparting your knowledge regarding personal business finance, hence, corporate finance.

  8. Controlling your emotions is important no matter the type of investor you are. Whether you believe in active or passive investing, you need to have calm emotions when investing. It gets too tempting to start selling when the market is bottoming out or buying when the market is getting higher. Dollar cost averaging is a great way to avoid that.

  9. Very good tips. I’ve been there 😉 For me the best tip from list is about setting lower limits. I am a stubborn person and so many times I want to be right. It is not possible, you can’t control the market. Nr 1 goal is capital preservation. This tip helps a lot to protect your money and stay in the game.

    • Well I think that your username says it all, which I like. Being safe and steady when it comes to investing is always a positive, although I am right there with you in being a little stubborn. Knowing your limits and setting them low is good advice, although of course is easier said that done at times. I like the idea of keeping capital preservation as the overall theme in my head too…that’ll help me.

  10. Indeed! It doesn’t matter if you’re starting small or big. What’s important is that you’re starting to invest regardless of the time, your age and your money’s worth.

  11. Investing time into proper planning is key to turning your dreams into reality. Operating a small business is not just about working for yourself or working from home, it’s also about having the necessary management skills, industry expertise, technical skills, finance and of course a long-term vision to grow and succeed.

  12. These are great tips to remember when you dip your hands in investing. For newcomers most especially the tip on NOT becoming emotional is of paramount importance. Usually, when one is just starting out – there’s that tendency that one’s portfolio becomes smaller and they start to second-guess their decision to invest in the stock market. Don’t. Just remember that the equities market is a wealth vehicle meant for the long-term. That means, you have to be invested for at least 5 years (some even say at least 10 years). So, when your port goes down, don’t panic. It’s just paper-loss. It’s not really a loss yet, until you hit the panic button and sell. Understand that the market goes in an UP and DOWN cycle, so just chill. But as suggested, it’s best to set your limits beforehand. That way, you’ll have a benchmark as to which point you’ll cut loss or when you’ll rake in the profit.
    tabby recently posted…how to withdraw funds from COLMy Profile

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