There is no one and done way to invest, but there are a few tried and true principles that have served investors well over the years. Here are 6 principles to consider for your investment planning:
What You Need to Know
1. Have patience and a long-term outlook
Great investment results do not happen overnight. Think of your money’s earning potentials in the context of years, not months.
2. Never buy on a tip… do your research
We all know someone who has “discovered” the next big money maker. Be wary of taking tips from friends and family members. Do your own research and make decisions that you are confident in.
3. Don’t sell on bad news
This may be particularly relevant right now. Markets tend to overreact on the downside, so be sure that you know the actual implications of any bad news on your investments before making a rash decision.
4. Don’t allow your emotions to take over
Panic, fear, and emotions often lead investors to make the wrong decisions. Processes and facts are what should be making your investment decisions for you. Having a plan and professional advisors to help you stick to it can greatly help reduce emotionally driven decisions.
5. Stay invested and take advantage of compounding
Compound interest is one of the most powerful tools that investors have. Leave you money invested as long as you possibly can to take advantage of compounding over time.
6. Know your investing philosophy and stick to it
Know your comfort level and tendencies before you start investing. This way you will be sure to have a portfolio that will work for you instead of stressing you out. If you are feeling anxious or uneasy about your investments, you are probably not in the right mix of investments.