Intelligent investors aren’t gamblers. If you’re hoping to get rich quick via pure luck then investing isn’t for you. To truly benefit from investing your hard earned money you need to set realistic goals, do your research and develop a long term plan.
Here are our top tips for investing wisely:
Asses your Situation
Perhaps the most important question to ask yourself is, “Am I in a position to invest?”. Diving into a long term investment strategy requires a strong commitment to your end goal and potentially tying up a significant amount of capital for a long period of time. Do you have your debts under control? Will you have enough liquid cash for unexpected situations? These are very important considerations if you’re planning on building long term wealth.
Set Realistic Goals
It is important to be realistic about your investment goals and how you’ll achieve them. Setting a realistic plan allows you to evaluate your investment performance and make informed decisions about where you invest your money.
One of the fundamental rules of investing is diversification. The old saying ‘don’t put all of your eggs in one basket” rings true when it comes to investing. Investing is all about risk and reward so many people choose to include a range of investments in their portfolio across many different sectors with varying levels of risk.
Keep Your Eyes Open
Unfortunately, there are many unscrupulous individuals and companies in the world praying on the uneducated investor. If something sounds too good to be true then it probably is. If you’re promised 100% returns in a short period of time then alarm bells should be sounding. Read legitimate financial publications and conduct as much research as possible before parting with any of your money.
Invest For the Long Term
Unless you’re conducting high risk, high reward day trading, don’t expect to strike it rich in a short period of time in the stock or property market. Intelligent investors realise that this is a long term commitment and don’t expect to make huge returns in a short period of time.
Hold Your Nerve
If your investments take a sudden hit, it can be tempting to cut your losses and run. If you’ve invested in blue chip stocks it may be wiser to stick things out and wait for them to improve. Pulling out every time you suffer a small loss is not a smart long term strategy.
Seek Professional Advice
Whilst there are a range of great finance blogs out there, there really is no substitute for sound professional advice. Rather than looking online for get rich quick schemes, book an appointment with a reputable financial planner in your local area and you’ll be much more likely to succeed with your financial goals.