One of the best ways to prepare for what future holds is to save money and also start investing wisely. Here are few investing tips that should help any beginner get better results. If you are also am investor, please share your own tips and I’ll update the article.
Investing tips for beginners
Don’t wait anymore
Are you interested in investing? Start NOW! Even if you cannot invest too much (most of us don’t sit on piles of money to invest), starting as early as possible will help you reap better results that someone who’s started later. Of course, if you’re in your 40’s it doesn’t mean you shouldn’t invest, just because you didn’t start younger. If investing is something you’d like to do, get ready to enter the ‘market‘.
Get educated as much as possible
Let’s say that the internet is providing us with countless resources of information, not to mention all the books about investing, podcasts etc. Try to learn as much as you can, since it’s your money you’ll be investing. If you have people who are already in the business, don’t be afraid to ask questions. The more you know about investing, the better prepared you’ll be.
The trust about investing is that you’ll have success and failures. The worst thing that can happen is to get all your money on a stock and that to go down. That means good bye your heard earned money. This is why the old ‘don’t keep all your eggs in one basket’ adage is so true – make sure you have more options open and this will help you avoid a disaster.
Act as if you owned the company
Something we all tend to forget is that we’re not only trading ‘numbers’. We’re trading our money and buying shares in a company, so we owe a bit of it. Study the financial statements and try to better understand the business you’re investing it. Again, the more educated you are, the better.
Think long term
There are people who trade like crazy and some who are investing slowly. It’s possible to get fast results with investments, but the better option is to think long-term and prepare for the future. Active trading can work well for you, it’s just that you need to learn more and also get some experience. Ideally, investing should be something for your future, since most of us are doing this to secure our retirement for instance.
Don’t expect to make a killing
Many people think about investing and doubling their money in a year’s time. Unless you are extremely lucky, this is unlikely to happen. You do need to expect lower returns (specialists average them at 10%-12%). This means that once again you need to get ready to do this for a long time and think about the future, not only about tomorrow.
Don’t go only for the big companies’ stocks
Many beginner investors are just targeting big companies, which are familiar to them and ignore a lot of smaller unknown companies, which can actually give better results in the future. Keep an open mind about it and don’t just choose the biggest companies, try to see if there are any ‘newcomers’ that get your attention.
Buy low, sell high
Just as with Forex trading, it’s always a good idea to ‘follow’ trends. If a stock is high, it’s a good idea to sell, if it’s low, then you can buy.
Steve Adcock from ThinkSaveRetire.com
One thing that I believe keeps people from investing is the assumption that it’s complex, or that you need some in-depth knowledge of stocks and bonds, yields, profits, industry trends, whatever. But in reality, you don’t. At the very least, setup a targeted retirement fund through a reputable financial company like Vanguard or Fidelity and they effectively manage your fund distribution for you.
One needs ZERO knowledge about investing to actually invest. Like you said, the key is not to wait. Start today with as much as you can reasonably invest with, then add to it every month. Before long, a respectable nest egg will be at your disposal.
Your turn now! Let’s hear from our readers: what investing tips would you give? What has worked for you?