How To Become A Better Investor
- July 26, 2019
- Arnold Chapman
When it comes to business everything seems uncertain. Much more if we talk about investment. Many people invest their money in businesses that do not turn out to be so positive and end up losing considerable sums. Even some people have completely broken due to wrong investments. For that reason we want to give you two important tips to invest correctly , and you can have the peace of mind to do everything right.
The truth is that in the history of humanity and contemporary, they have been through significant crises that have directly affected investors. We can put two examples that are perfectly known in the field of investment. One of those crises was known as the Great Depression, and the other was that of 2008, known as the Real Estate Bubble. Those crises were local, but at present the crises are global and that means that anyone in the world can be affected by similar crises.
What Makes A Good Investor
In the field of investment there are winners and losers. Good investors and bad investors. There are gains and losses. Triumph and failure. Glory and decadence. What makes the difference when investing? . That is the big question that must be answered. The patterns of successful investors must be differentiated . If you look closely at these you will find similar behaviors, patterns established perhaps unconsciously, but which occur in those investors who manage to win and win.
How To Be Successful In Investing
The other important question is what is success in the field of investment? Actually that is the first thing that must be answered in order to establish the patterns. People often measure success by the amount of money they make in an investment. Although it is a valid measurement, it is not the most accurate. Actually the correct way to measure success is time. Over time, we refer to the horizon of investment , to the sustainability of the gains in the trajectory of investments. Here are several tips that will help you achieve success under that perspective.
Be actively involved. Monitor your results and evaluate weekly and quarterly. The amount of time you spend supervising your properties depends entirely on you. During the hours of operation, the movement of investments is only a click away, and you could potentially waste a good amount of time each day tracking the movements of your actions.
Few would recommend such an obsessive control, and for good reason. At the beginning of your career as an investor, it may be slightly addictive to log into your brokerage account and see how stock prices change and the ascending or descending value of your portfolio in real time. This can lead to impulsive actions that you may regret in the future. While this may seem contradictory, reviewing what happened with your investments once a week, with a clear head and, say, a cup of coffee on Saturday mornings, helps you gain an adequate perspective of your positions. In a contemplative environment, you may wonder how your choices go against your goals.
Also, read the quarterly reports. It requires that listed companies report their profits to investors every three months. Familiarizing yourself with the quarterly reports of the companies you own will improve your decision making and make you less dependent on the opinions of analysts, investment experts, and friends.
Don’t be afraid to ask. Identify and investigate investment candidates.
If you are looking for an appreciation of your funds, then investing in growth companies, which improve annual revenues faster than the market in general, is a logical way to put money to work.
The same can be said of stocks, which are traded at a discount to the market in general but may increase once more conservative investors recognize their potential.
If you are looking for income, probably at some point you consider stocks in large stable companies, “blue chips”, with dividends that generate a healthy annual return for shareholders, anywhere between 1.5% -4%, more or less.
Bonds also remain a popular choice among those who want an investment that generates income. The owners of bonds receive regular interest payments, and like the shares, and can appreciate or depreciate their value.
Invest wisely and patiently. Invest and commit to a defined retention period Once you have selected the first shares in your portfolio, have chosen an intermediary and clicked “buy”, it is time for your money to start working for you. If the duration of a retention period is one of the main characteristics that separate the investor from the speculator, how do we define this length, often referred to in the long term?
There is no single agreed definition, but we can look at the accounting standards that define short-term instruments such as those that last a year or less.
Think of the long term as at least a year or more. If you agree to this retention period, you will be obliged from the beginning to choose companies of reasonable quality to buy. For many investors, a long term can mean five or even 10 years, and longer tenure periods are not uncommon among those who discover really large companies where to invest.
Decide and articulate your goals. An important step on the road to becoming an investor is to put into words the reason why you want to move your cash (sitting safely in the bank) in a higher growth vehicle where you may be at risk. In other words, it will increase your chances of success if you first understand why you are investing, and recognize that your capital has the potential to decrease, as well as increase its value, depending on the amount of risk it assumes.
Are you investing for retirement? Or maybe your child’s college education?
Knowing, articulating and annotating a single general investment objective will help you clarify the types of stocks, bonds, exchange-traded funds and other financial instruments that you will buy as you build a complete investment portfolio over time.
Many think that there is no real obstacle to becoming an investor, simply opening a brokerage account and buying some shares. Becoming an investor is not difficult, but understanding some basic points at the beginning can save you trouble later on so these tips can help you out immensely.