As the new year rolls in, many will be looking to sort out their finances in a smarter way, for many that will be investing.
However, for most, the idea of investing seems a particularly daunting task. With the huge array of investment options out there, and an underlying fear of losing your money, it’s not surprising that many people shy away.
With millions of how-to investment books published and bought every year, there is high demand for learning to make the right investment. Ultimately though, the best advice stays the same. We have condensed some of the main points.
1 Seek value
Identify low-value stocks for companies of high-quality. Easy, right? Of course, this isn’t always so clear cut, but is a good general rule of thumb. Ensure that emotional sentiments are put aside when doing this also. Some of the best companies to invest in are those that you might not even necessarily support.
2 Think long-term
Investments should be made with a long-term goal in mind. It is very easy to be swayed by investments that are seeing an increase in value now but jumping between investments very rarely works.
Have faith in your long-term plan. Think investment property – a steady, passive source of income that is likely to supersede many short-term investments.
3 Diversify your investments
Diversifying your investments is a smart move. Putting all of your eggs into one basket is rarely advised. Sure, if the investment returns, as it should if you have done your research and used a reputable introducer, you will see the benefits.
However, not every investment is 100% safe, and the low of losing money on your sole investment will be far worse than a diverse set of investments, most of which should return. Spread your investments to reduce personal risk.
4 Investing isn’t easy
Investing, generally speaking, is not as simple as putting money into an investment and getting a return. You will have done research into the investment you wish to go into. For instance, property alone has many different areas to invest in – think student property, hotel rooms etc.
Many will make mistakes when investing, not many will have flawless returns. A popular phrase in investing from Rukeyser, “just remember that there are only two kinds of people: those who have made mistakes of their own and the liars”.
Using an investment introducer such as FJP Investment will minimise your risk of losing money with six years of successful trading and a portfolio of happy clients.
5 Invest within your own means
Only invest money that you can afford to lose. Again, no investment is 100% safe, never invest money that could put you in financial jeopardy. Don´t try and chase lost money, it could result in further loss.
There are many other and more productive outlets for time and energy. Stay focused on your investment strategy, it will pay off over time. Remember that money is a tool for living a good life, not an end in itself.