Tips on Investing (2017 Update)

June 12, 2017 Facebook Twitter LinkedIn Google+ Latest News,Moneylender

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The 5 Commandments of Investing That Work

The law is defined as a set of rules observed by society to guide orderly conduct. Laws are not only used as a guide for members of a community. But also as a mechanism to offer redress in the event wrongful acts. I could say the same about the commandments of investing, only that they will not offer you redress when aggrieved but they will guide you to make sober investment decisions by helping you set clear goals; make informed decisions; develop self-control and progress to an investment guru.

Here are the five most important commandments of investing that work.

Set Clear Goals

Before you begin on any investment journey, start by asking yourself the all-time fundamental question, why are you investing? A goal must precede any investment. Don’t just invest, when you do; you will be vulnerable to making decisions based on rumors, emotions, and unsolicited opinions. Like a ship sailing without a destination, you will probably get lost at sea, fall in the hands of pirates or not leave the habor.

Having goals is the key that will define your investment style, portfolio mix and risk and profit appetite.

Question all “Authority.”

Now that you have set your goals clearly and are about to set sail, you will realize that there are many people are ready to give you advice and guides towards “successful investing”. The stock markets are full of titles such as CFO’s, CPA’s, and CFA’s. The internet is also jam-packed with “free” advice on when to buy or sell as well as how to build a hustle free and profitable portfolio.

I say, read and learn as much as possible. Get credible books, understand different financial analyses and pick nuggets from great investors. This way you will get into the right path of asking and responding to the right questions about your portfolio.

Remember, all these “authorities” are primarily focused on making money from you.

Cultivate Patience

One of the most valuable attributes of a successful investor is patience. When you are patient on your learning, buying and selling you will realize that investing is not the same as gambling. Successful investors subject their decisions to proven scientific scrutiny which often takes time but has predictable results.  Take a tip prom insurance companies and casinos, they don’t lose their money, but their customers take all the risks.

Be patient, treat selling just as important as buying, and avoid panicked decisions. Remember, investing in the stocks is just as exciting as watching paint dry, if you are looking for a thrill, visit a casino.

Do not Court or Despise Risk

The overall objective for any rational investor is to make the most gain from your investment, not to lose it or maintain it at low return. In the quest for this, taking risks is inevitable. However, risk taking should be calculated and losses mitigated. Define your investment goals, educate yourself, ask the right questions and determine the appropriate risk level of every asset in your portfolio.  Avoid speculation and emotional investing.

Keep in mind that in the stock market, strategic bulls and bears grow their wealth, but the pigs get slaughtered.

In conclusion, the route to successful investing has its fair share of risks. Be prepared to get hurt, disappointed or even make the wrong call a few times. Remember, great investors such as Warren Buffet, also slipped on a couple of occasions.  But when you follow the above commandments and learn from the experiences of others as well as your own, you will make a successful investor.

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