- How to get started?
Define our goals. Make sure we know why we are investing. Long term, mid-term, or short term. Example, at the age of 40, we may to want start retirement planning. If we retire at age 60, that means we have a time horizon of 20 years. How much do we need for our retirement? Our investment plan or strategy will depend on these goals.
- Learn and Acquire knowledge.
Investing is a combination of science (fundamental financial knowledge) and art (qualitative factors). Spend some time to learn how the investing market works and what investing instruments are available in the market. Knowledge improves our decision making.
- Know ourselves.
What type of investors we are? Aggressive, conservative, panicky, emotional etc? It is always advisable to engage professional to assist in charting our investing strategy. Knowledgeable and ethical professionals will assist us in eliminating “emotions” in our decision making.
- Do not put our eggs in one basket.
Diversification ensure a balanced portfolio and keep risks manageable.
- Invest for the long term.
This is the most unexciting advice in investing! But it is the best approach to achieve our investing goals. Never try to time the market. Stay away from so-called experts who try to persuade you to part with your money with tales about how good they are in predicting the market.
- Keep learning.
Knowledge is power.
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Adapted from an article in www.investopedia.com