It’s always good to save for a rainy day. A nest egg never hurt anybody. If you’ve heard these sentences, you realize they’re all true. The best way to save would be to be prudent about your spending and ensuring there’s enough to put away in the bank. Or you could make smart choices and invest your money to give you good yields.
Making a successful investment is not rocket science. Follow a few basic principles and stay safe and invested.
1. Know your investment
If you’re investing in stocks, make sure it is certified by an agency like Moody’s and Standard & Poor and has great rating. That means you’re protected to some extent from the vagaries of the market and your money is well spent. Use your broker’s expertise to help you with this first step.
2. Turn off the noise
Don’t listen to all the noise and hype that surrounds certain investments. If it sounds too good to be true, it probably is. Get rich quick schemes or those that promise low investment and high returns are most probably scams and will not work.
3. Get your facts straight
Use the finance sections of newspapers, online sites and news channels to get your information before you decide where to park your money. You can also get help from other seasoned investors and websites will enable you to get in touch with other share market players and learn from them through tips and tools.
4. Start small
It makes sense to test the waters before you jump in wholeheartedly. So invest a small portion of your money and then go big. In fact, start with a site like WallStreetSurvivor where you can invest money through a practice account of sorts. You can use other sites like Zecco, OptionsXpress and use their demo videos to learn how to invest in stocks, options and futures.
5. Save money
It’s important that you budget expenses well so as to save enough to invest. A minimum of 10% of your income should be put away as savings and this needs to be done on a consistent basis. So if you’re planning to invest later, start now.
6. Stay updated
Once you’ve made your investment, make sure that you track its progress on a steady basis. Read the paper, talk to people, be informed. This will help you make decisions about future investments and plans and you can build a great portfolio. Markets are dynamic, even volatile and it makes sense for you to know what’s happening the world over.
7. The key is consistency
Don’t make a single investment and then stay idle for a while. The key is to invest and do so on a consistent basis. This will help you build and expand your portfolio so invest in regular intervals for more growth.
8. Don’t overreact
Like we’ve already seen, the market is hardly a smooth, static pond. It’s more like an ocean with eddying whirlpools and investors are quite often at the mercy of the ebbs and tides of the forces. So don’t panic when things look bleak. Stay focused and optimistic, know your area of investment and rest assured.
Investments, when done right, provide a safe future for your family and you. Use these simple tips to make sure you’re spending your hard earned money well. Here’s to a secure future.