Five Steps for Proper Investing
Five Steps for Proper Investing
Tip 1: Diversity
Most successful investors divide their money among different asset categories or put their money in funds that invest in more than one category.Diversification increases the chance that a temporary poor performance by one asset category will be counter-balanced by good performance in another. Diversification can improve your earnings potential while controlling the amount of risk you take.
Tip 2: Think Long-Term
Most successful investors have a long-term plan. By investing money regularly over a long period of time, you’ll get to take advantage of the downs as well as the ups of the market. (When values are down, your contributions will buy you more.) Plus, by holding investments for the long term, you give them time to grow and potentially overcome short-term volatility.
Tip 3: Review Your Needs and Circumstances Regularly
While investing for the long term is important, it’s also important to update your investments as you get older and your financial circumstances or goals change. Most successful investors go after higher potential earnings more aggressively in their early years of saving and investing. Then as they approach the time they’ll need a withdrawal, they gradually shift to a more conservative mix.
Tip 4: Avoid Trying to "Time" the Market
Contrary to what you might expect, most successful investors do not anxiously watch the markets. Nor do they constantly move their money in and out of different investments.The odds are against your being able to predict when the market is going to go up or down. Even the pros do not have a very good record of buying "low" and selling "high".
Tip 5: Stay Cool
Remember your long-term plan.It can be risky to make rash changes. For instance, you would be locking in a loss if you pulled out of a fund that lost value before it had a chance to rebound. Doing this could turn a temporary market condition into a permanent one for you.
© N.M. Finserv ---- www.nmcomp.com/finserv
December
Tip 1: Diversity
Most successful investors divide their money among different asset categories or put their money in funds that invest in more than one category.Diversification increases the chance that a temporary poor performance by one asset category will be counter-balanced by good performance in another. Diversification can improve your earnings potential while controlling the amount of risk you take.
Tip 2: Think Long-Term
Most successful investors have a long-term plan. By investing money regularly over a long period of time, you’ll get to take advantage of the downs as well as the ups of the market. (When values are down, your contributions will buy you more.) Plus, by holding investments for the long term, you give them time to grow and potentially overcome short-term volatility.
Tip 3: Review Your Needs and Circumstances Regularly
While investing for the long term is important, it’s also important to update your investments as you get older and your financial circumstances or goals change. Most successful investors go after higher potential earnings more aggressively in their early years of saving and investing. Then as they approach the time they’ll need a withdrawal, they gradually shift to a more conservative mix.
Tip 4: Avoid Trying to "Time" the Market
Contrary to what you might expect, most successful investors do not anxiously watch the markets. Nor do they constantly move their money in and out of different investments.The odds are against your being able to predict when the market is going to go up or down. Even the pros do not have a very good record of buying "low" and selling "high".
Tip 5: Stay Cool
Remember your long-term plan.It can be risky to make rash changes. For instance, you would be locking in a loss if you pulled out of a fund that lost value before it had a chance to rebound. Doing this could turn a temporary market condition into a permanent one for you.
© N.M. Finserv ---- www.nmcomp.com/finserv
December
posted by N.M. Finserv at
6:20 PM
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