Investment is an important part of any financial portfolio. Knowing the ins and outs of how to invest properly takes some learning though. Fortunately though, nowadays there are numerous ways of becoming more informed. The internet has made it much easier to learn about investing and to actual invest when you are ready.
A first-time investor should do what’s necessary to become informed about the process.
Knowing some investment management basics as a first-time investor reduces chances of making costly mistakes.
Do your research
- -Reflect on your objectives and how tolerant you are to risk. The more risk tolerant you are, the higher the chances of you earning faster returns on your investment. If you’re averse to risk, your returns will differ.
- Understand your options
- -Research on your own terms
- -You don’t a lot to get started
- -Know what you’re investing in
- -Know what outcome you aim to achieve
Learn the basics
Once you’ve done some research, you can then go about actually putting what you’ve learned into practice.
- -Build up an emergency fund first
- -Set a financial goal
- -Keep the three D’s in mind: Discipline; Diversification; Diligence.
- -Investing early is key for anyone interested in building wealth. It’s important to start earlier rather than later in life.
- -Establish a portfolio that is age-appropriate
- -Diversification is key
Avoid making rookie mistakes
Getting investment management basics right, means that you should avoid making mistakes costing you more in the long-run. Reach out to the right people for help and equip yourself with the necessary knowledge.
- -Partner with a financial advisor if necessary
- -Keep the end goal in mind
- -Don’t engage in unnecessary trading
- -Keep emotions out of it
- -Never invest money unless you’re okay with losing it
- -Be mindful of fees