Help with investing is often sought when people wish to dabble in the world of investment for themselves. Firstly, they want to know how the world of investment functions, after which they want advice on what they should invest their time and money into. Here are a few tips to help you out of both points.
Look towards books for solid advice and help
The information you can find in books may help you advance your knowledge a little. The information you read in published books is more likely to be correct, as publishers are often unwilling to invest their money in dubious books of this nature. The information you find in books (especially accredited textbooks) is more likely to be correct than the information you find online or via e-books/Kindle books.
Think about contacting an investment advisory firm
Advice is only worth as much as you pay for it. There are some good investment advisory firms and there are some bad ones. You need to find yourself a good one and start building your knowledge and your portfolio with their help. If they are good then they will help to make you richer so that you keep coming back to them for advice. A lot of people use CMC Markets for help investing, forex trading and so forth.
Consider schooling to improve your knowledge
If you are serious about investing, then why not go to college or university and start learning about investing and the business world. A simple course in economics will help you improve your knowledge of money in a way that will make you a much sharper investor. You also have the added benefit of learning correct information in a learning environment. You are unlikely to be spoon-fed misinformation such as you would be if you learnt about investing from the Internet or from friends.
Learn from people who are successful investors
People who have experience with investing and who are successful at it are the best mentors to take on. They are hard to find, as people who are successful are often unwilling to pass on their secrets. But, if you can find one then he or she may prove to be your most valuable asset. A good investor will know that having as many income streams as possible is a good thing. So, consider offering him or her a deal, where you donate a monthly percentage of your earnings to him or her, in exchange for good advice and mentoring. That way the mentor has a financial incentive to give you good advice without taking on any risks.
Monitor investments for months in advance
When doing initial research on an investment you are only exposed to the investment as it stands and its recent history. Monitor your investment for a few months first to see if it does what you expected it to do. The more you do this then the better at predicting investment outcomes, to the point where you will no longer have to wait months before investing.
Investigate your investments as fully as possible
No company is going to tell the world that is has a fatal flaw in its products, or that it plans to lay off 300 staff next summer. Companies will do all they can to protect their stock prices, so you need to do as much research as you can to find out every dark secret your potential investment holds. Find out if your newest property is going to have a highway built across from it in two years, or if it is built in a radon heavy area. Find out if the savings accounts you are going to open are in a bank that is on the edge of going under, and find out if your share prices are being inflated by good online marketing.
Investigating your investments fully takes a lot of work and an incredible amount of tenacity, but the rewards are often worth the time you invest. This is true, even if your research simply helps you to avoid making a bad investment.
How much are you paying for risk?
Great investment advice is only relative to how much money you are prepared to risk on it. Advice of any kind should always be treat with the utmost skepticism. However, here are a few pieces of investing advice that you may like to consider.
Great advice is only worth as much as you pay for it
This applies to any advice, since it is often given out so freely. Would you take dieting tips from a fat person? Or, dating advice from a lonely person? So, why are you taking financial advice from people who are not rich? If you want advice that you can place more faith in–then buy it. This does not mean that all the financial advice you buy will be worth the money (or valid), but it has a higher probably of being correct and profitable than free advice.
If you do not like watching a straight line for six months then do not invest in shares
Many investment advice websites fail to fully appreciate the mindset of the average investor. They do not remark upon the fact that it takes a certain type of person to be successful when buying stocks and shares. Many people are uncomfortable with keeping their money in their shares for five years, and many are disheartened by the fact that their volatile shares have started to level out. In other words, if you are not comfortable seeing your share price remain the same price for at least six months, then investing in shares is probably not for you.
Set put options when business is booming
When people start to see stock prices and profits rising, they often try to get in on the action. Many people try to get in and purchase whilst the company is just beginning to do well so that they can be on board as the company becomes more and more valuable.
However, the immutable rule of “What goes up must come down” is ever true. Set up put options in anticipation of the company falling flat. The financial rewards will be quite high so you may not have to put a lot of money into your put option. Many times the line will continue to rise, but every now and again, the line will plummet and make you a fortune.
Advice your parents should have told you
Here are some investment tidbits that you should know already. They are pieces of common knowledge amongst senior investors.
Never take up a standard bank product.
Insist upon a tailored investment suggestion that suits your needs, finances, future goals and the current economic climate.
Earn money from your liquid cash
Transfer any excess cash into a flexible savings account so that you are at least earning something on your petty cash/ liquid cash instead of letting it sit in a bank without earning interest.
Small and safe returns are not risk free
A smaller return may be safer, but it takes longer to earn, which means it is placed under risk conditions for longer. It takes longer for you to earn your profit; thereby there is more opportunity for something to go wrong.
If they advertise 6% -10%, they mean 6%
Targeted capital formation, such as that seen with life insurance and pension funds, often have returns on the bottom rung. They often have obscure rules and loopholes that mean they may advertise a potential return without having to deliver on it.
Join an investment club with your spare money
These clubs bring together lots of people’s intellect and drives in one arena. If your club is well managed then you can invest a little of your money and earn some back quite comfortably. Do not make the mistake of devoting all of your investment funds into the club, as this poses an unacceptable risk to your financial future.
Fees are key to your success
If you are investing in unit trusts then you must keep on top of the fees. The success of unit trust investments is often dictated by their fees.
