‘Investments are subject to market risks’. You must have heard this line way too many times in advertisements run on televisions, radios and the internet. But have you ever wondered why it is repeated so many times? Investments although being a great way to save and earn money can be a reason for you losing all your money and property if you make a hasty, uninformed decision to invest in a poor stock or business. The kind of expertise that helps you know what investments can be fruitful takes years of experience, tonnes of expert advice, following recent trends and news; and hours of research and reading up on the market. If it is your first time in the investment game, the whole experience can get you from an Olympics of butterflies in your stomach to a nerve-wrecking migraine. There will be so many questions that you would ideally have to consider. Who can be the best person to get advice from? Can I trust these people? What if I am making a mistake? And most importantly, what if I end up losing all my money? All these thoughts are quite normal to everyone who is a newbie in the investment game.
Investment can seem like an encyclopedia of confusion and tough decisions but in reality it is quite simple to understand. It is mainly poor advice from others, lack of knowledge and speculation by investors that costs them their money. Investments can be the stepping stone towards long-term saving ambitions and habit. Cultivate a habit to always be informed about what is happening in the stock market, the stocks that are consistently doing well and basically a pattern the stock market can potentially have. And after you are done investing, make sure you keep track of your investments. To do so, always have a software for managing investments in hand.
Do’s in Investment:
- Always hire a financial advisor. This is something you will NEED to do as you will require a person who knows the stock market like the back of his or her hand.
- Understand diversification of investments and implement it. Many people mistake diversification to be increasing the number of investments and this can sometimes put them in quite a bit of a soup. Diversification focuses less on number and more on the type of investments made.
- Consider the fees. When you are buying a stock, do not just focus on the returns also pay attention to the fees of advisors, commissions etc. According to Forbes, you can lose as much as 40% of the deal on the fees.
Don’t’s in Investment:
- Don’t make a choice when you are emotional. This can be a disaster. Do not let your liking or dislikes towards a business decide your investment.
- Do not wait. Time IS money
- Do not think that you can gauge the market. Most times you cannot. It is your research that will help.
Keep these in mind before you invest!