This is a contributor’s blogpost …
You’ve probably heard it time and time again, but once more won’t hurt: you don’t need to be Warren Buffet to be a successful investor. Every seasoned investor has gone through the phase you’re in now, experienced the ups and downs, and fine-tuned their strategy. While a large part of good investing is learned through trial and error, here are a few fool-proof things you can do to get better at investing…
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Get a Financial Advisor
If you’re completely new to investments, or you’re feeling a little lost when it comes to the kind of goals you need to set for yourself, getting a personal financial advisor will make it so much easier to draft a solid plan that you can follow as you get more and more involved in the markets. They’ll also be able to talk you through potentially confusing processes later on, like explaining how to start a hedge fund, in words you can understand.
Know What to Look For
Before you invest in any asset, you need to know how to check the company’s profit history, how to assess the long-term viability of the money you’re able to pump in, the details of different business models, and how to compare a business’s performance to its close competitors. If you throw yourself into any market without knowing how to identify a good opportunity, it’s going to chew you up and spit you out faster than you can imagine!
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Know How to Handle your Money
Another important part of becoming a better investor is avoiding falling into what’s commonly known as the herd mentality. Poor investors tend to bounce their money from one stock to the next, accepting unfounded advice from unfounded investors. In many cases, good investments have very little to do with timing, and are much more about letting your money germinate in the right vessels. Fail to understand this, and you could find yourself hurtling towards a personal financial disaster!
If you’re wondering when the best time to start investing is, the answer is yesterday! Your early 20’s is by far the best time to start making your money work for you, or even earlier if you have an unlikely amount of capital in your teens! When you make mistakes when you’re young, you’ll have more time to recover and learn from them. This way, you’ll be a much better investor by the time you move up in the company and start making some big bucks from your job.
It’s absolutely essential that you avoid putting all of your eggs in one basket as you get into the world of investing. By getting into a mutual fund, you’ll be able to spread out your investment and buy a number of different stocks for your portfolio. By doing this, you can enjoy a secure, diversified portfolio, spanning a number of different companies and sectors. Therefore, if one part of your portfolio hits a crisis and goes under, you won’t be put straight back down to zero!