You have to educate yourself with the basic knowledge of investment and stop believing in luck or chance as accidents don't make happen better investments. In case you want to become a good investor.
Just give some time to work on it and keep yourself updated with investment trends. In this article, we will discuss the ways so that it will guide you to be a good investor.
Your Money is Like Your Soap
One of the great scholars in the field of finance once quoted - "Your money is like soap. The more you handle it, the less you have."
How true this statement is, the number of times you move your money the number of times you have to bear transaction costs, and sometimes you are subjected to taxes, and there is also a possibility that you are moving your money at a wrong time.
Many studies and research have shown that those investors who are underperforming are usually having the very wrong timing of moving money. But to have above average returns your timing of moving money should be part of well-designed investment plans.
Start Watching Sensible Characters Than Mere Spending Your Whole Time in Watching News
I have a friend who grew up watching Star Trek, main characters in the series like Spock, a Vulcan who, and is always logical to the faults which are very unlike than humans.
Many can learn from this character as he is very cool, not influenced by emotions and taking rational decisions it does not matter how big the problem is.
Ancient economic theories also suggested that at that times humans use to take rational decisions and resulted in maximizing their wealth.
The advance field of behavioral finance is something different and suggests that good investor should have the knowledge of behavioral finance and should watch more Star Trek.
Steer Clear of The Fire, If You Can't Handle the Heat
The stock is not meant for everyone, and the Solid financial plan can be implemented only by guaranteed and safe investments.
If stock market and mutual funds are not your cups of tea, you should avoid investing into it until you educate yourself with good tips and techniques. If you still can't handle your nerves while investing in it then just stay away from it.
Slow And Steady Wins The Race
If you remember the story of the "Hare & The Turtle" were confident hare stops in between the race and takes rest, thinking that turtle is way behind but finally slow and steady turtle wins the race as Hare was still sleeping.
It applies in the stock market too, if you are managing slow and steady savings and disciplined plans then you will surely benefit with the good results. If you start being overconfident and bet on luck, it will turn out to be an unpleasant surprise.
Don't Get Excited With Cash
If you think money in the form of cash or market accounts is wasting away, then you should think about it again. Don't get excited when you have money in the form of cash and until that time just educate yourself and learn the better and smart ways to invest it.
People who are having cash always have the advantage when the market is down or want to invest in real estate.
Understand Your Strengths And What You Own
The stock is different from stock index fund and in the same way bond fund is different from the stock fund.
It is observed that many people who are owning large-cap equity mutual funds may be having some irrational fear that they will exhaust all their money, and they don't even realize what they have. As it is not possible, that top 500 U.S. companies will shut down out once, so it is very wrong of them thinking that they will lose all their money.
There is always a difference between the levels of risks, and obviously, level 5 investment risk is very different from level 3 investment risks.
Read Reputed Books, Not Just Rely on Websites
Many people use to find information on the internet, but it is very difficult to decide the authenticity of the course or information provided but still, some of the time's information provided is astonishing over the internet.
You can still need to get in-depth knowledge of the subject, and for that, you must read some well-reputed books. If you invested some of your time to educate yourself and committed yourself to learn new trends will surely benefit you with the higher return on investments, and you should keep updating yourself.
Understand Your Shopping Habits
Have you ever observed that you saw something on sale, but you thought to let the price get down more and then you will buy it?
In the same way, when stocks drop substantially in price, it means your future financial goals are on sale. So to have better investments, you need to recognize and analyze which things are on sale, and you would like to buy it now.
Don't Follow the Seminars or Advice Blindly
You must have followed many seminar and commentary at public platform related to the investment market.
But before following their advice blindly you should understand that they not even know and are not updated with your particular situation and circumstances so how come their general advice will be applied to your case.
If you need advice on financial investments, you can always opt for financial and investment experts who can guide you to achieve your investment goals.
Dollar Cost Averaging
Dollar cost averaging is one of the techniques for reducing market risks by having automated investments of the set amount at regular time intervals. This technique encourages you to buy the more shares when the market is at its low and discourages you when the market is high.
The smart savers usually use this technique and use to enjoy a good return on the investment for many years. So, what you are waiting for start using dollar cost averaging strategy.