Investment advice for neophyte investors
If you know next to nothing, how do you go about the business of investing? The first thing to know about investing is, how much do you really know? If it’s not a lot, you’ll need to read a lot to educate yourself.
To be well informed, you need to read up on the basics. Find out what a stock, bond or mutual fund is, and what are the differences between these three financial products and their variables. Read books on financing and investing.
Talk to expert investors, watch videos and live presentations. Once you understand the differences and the risks involved in investing in each particular vehicle, you can move forward with confidence.
Now you can move on to the second phase of learning about investing. Get some experience investing in small stocks and learn from your mistakes as well as your successes. However, find out first what type of investor you are. Here are some tips to help you get to the answers.
As you go about your investing business, have a game plan and set definite goals. The answers to these questions will be valuable guides for you in your adventure of investing your funds.
o What is your schedule for investing?
o What industry sectors are you interested in investing in?
o What is the amount of funds you can safely use to invest to achieve your goals?
o Have you considered your short-term financial needs or goals?
o Do you plan to live off these investments in your retirement years?
Determine your investing style. Are you a risk taker? Or do you like constant earnings? Consider this thought, will you be able to sleep soundly at night, knowing that your investment is declining and it will take a long period of time before it increases? Or do you prefer to turn your funds over to a fund manager? Do you like minimal risks when investing your funds? Consider the type of risk taker you are, as this will help you choose the financial vehicles in which to invest.
How much time do you want to spend investing in stocks? Is it only 15 minutes a day? Or do you find spending 7 to 14 hours a week reviewing financial statements and debating the merits of these actions the ultimate entertainment?
Consider carefully the answers to these questions. By knowing what type of investor you are, you can play to your strengths and minimize the risks of the funds you are investing with.