Saturday, March 24, 2018

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One quick look at an investment and you’ll think “oh my god, how does anyone understand any of this?!” To a layman, the idea that you can turn a couple of bucks into a million dollars is as easy as learning quantum theory. Sure it’s possible, but the chances of it happen are slim to zero. Anyway, that’s the attitude individuals have, particularly if there is a lack of knowledge and experience. Do you know this culture of fear is reducing your ability to make money?

No one expects you to take like a duck to water. Investments aren’t guaranteed and there are bound to be errors along the way. However, success is relative so there’s no reason to make as much as a Buffett or Musk. It’d be nice, but it’s important to stay grounded in the beginning.

With those words of advice ringing in your ears, below are the tips which should ease your fears. This is advice that makes people think “yes, yes I can!” 

Ride Winners And Sell Losers

Conventional wisdom dictates that you should buy low and sell high. Another good piece of advice though it is, selling at the right time is the key to success. Get rid too soon and you may lose money, yet keep hold for too long and the investment may tank. So, the simple equation is to sell the losers (obviously) and ride the winners until they begin to turn. Everyone wants to know the nuclear codes, and the truth is there aren’t any. What there are is a set of guidelines which any investor can use to their benefit. Take a loser as an example. Stocks underperform, and there’s a chance they will bounce back. Still, if it has been a while and it shows no signs of recouping its losses, it’s time to get out unscathed. Never let ego prevent you from making a savvy financial move. 

Cool Down On The Small Details 

Regarding the research that goes into choosing an option, the fine print is essential. This example, though, is talking about something else, something called short-term gains and losses. Using generic rules isn’t a smart move on the whole, yet this generalization holds true: investments fluctuate. Whether they go up or down, they tend not to stay steady for the first couple of months. In fact, it can take a year for a stock or share to plateau at a constant rate. Please don’t worry when there is a hike because it isn’t a clear indicator of the future. A feature of the market may make investors take a gamble or pull out, but they will be back. Short-termism hits new investors all of the time and it’s essential to stay strong and hold firm. After a year or two is when it will start to show its true colors.

Avoid Penny Stocks

Ever watched Wolf of Wall Street? If you haven’t, Jordan Belfort made millions from trading these stocks and he was a shady character. Not that a Hollywood movie should stop you investing, but the film does show you the risks. To lay it out plain and simple, there is as much risk with a penny stock as a high-value option. Imagine you invest $10 compared to $100 and it drops to $0. $10 may only be a small amount, yet it’s 100% of the total investment. By the law of percentages, if a $100 stock fell by 50%, you’d lose a small chunk of change in comparison. Also, you have to take into account the reliability factor. There is slight chance that the penny stock may boom into a winner and provide a huge ROI. The odds, however, are high that it’ll fall in value and you’ll lose the stake. A reputable option costs more but carries less risk.

Don’t Gamble On A “Hot” Tip

“Hey, do you want some advice? Cool, because this stock is about to soar. It’s 100% guaranteed.” Investors find themselves in conversations like this on a regular basis, and there is a sign it’s a scam. The glaring symbol is the fact that they advertise it as a sure-thing. Nothing is certain regarding investment, and you should remember this at all times. Gambling on a tip is a poor move because it neglects the legwork needed to be successful. Wealthy men and women don’t take advice based on random strangers in the street. Instead, they find the areas where they think there are opportunities and investigate. They may have more resources and more knowledge, but anyone can conduct a simple Google search without any hassle. Should you hear something and check it out, it’s a different matter because you’ve evaluated the pros and cons. Just don’t take a person at their word if they are unreliable and untrustworthy.

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Diversify

You’ll hear this term a lot because there is never a reason to put all of your eggs in one basket. Portfolios need to include a variety of investments as it lowers risk and increases the chances of making money. How you do it is the trick and it’s where the majority of people fail. Typically, beginners see diversifying as dipping into separate industries. So, as well as having gold and real estate, they’ll add stocks and shares. There; all done. Not quite because to be successful there has to be a range of risk too. Usually, a portfolio will have a majority of steady options, but it’s also important to include high-risk, high yield. Bitcoin may qualify depending on your position, and you can check out more investing info by following the link. The high-risk stuff should only be a small percentage of the overall investment, of course. Too much of it and you may end up doing the thing you tried to avoid in the first place.

Pick A Plan And Be Consistent

Last but not least, it’s best to choose a strategy and stick with it through the good and the bad times. Everyone has a personal style, and it makes the process easier which is why it isn’t closed-minded to stick rather than twist.

Do you think you can be a successful investor after reading this post?

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