Every time you hear the word "INVESTMENT", it may sound like an unattainable challenge, limited only to professional economists. However, it isn’t as hard to do as you think. Here's our definitive guide for you to start your investment right away!
Nothing holding you back from investing. You can do it even if you haven’t graduated with a major in finance or you aren’t a professional broker. With the right mentality and discipline, you can be a part of this world.
First of all, you’ll need capital. It may sound obvious, but you’ve got to save some money to invest it. This should be a dispensable amount that doesn’t belong to any emergency fund. The more money, the better.
Saving money can seem hard to do, but it’ll be worth it. You can invest some of it in order to make small profits, but take into account that the bigger profits will be achieved with higher amounts of money.
Another thing you’ll have to do is gain knowledge of the market and how it works. This can come from investment books or professional brokers. Just make sure you do a complete research instead of just following one of these advisors.
Training your mind is also a big step. Patience and discipline are key abilities, since you’ll have to learn how to consider every investment choice and not leaping off to the first offer that you see. In the event of a bad decision, calm and determination will also help you get back on your feet.
All in all, you’ve got to remember that investing isn’t pure luck. It doesn’t work randomly, which means you can predict it with some training. Capital, knowledge, and a firm approach will help you make your way through the market!
HOW TO DIVERSIFY YOUR INVESTMENTS
You have probably heard millions of times about "DIVERSIFYING YOUR INVESTMENTS", but it's not a step you should take without making a little research about the risks and benefits engaged.
It's easy to get involved in the market and make terrible decisions, so you should learn a bit about diversifying your investments before you actually do so! In this case, the goal is to diversify as soon as possible and protect your investments before a bear market cycle. Take note of these special tips and diversify your investments wisely!
1. Spread Out Your Investments
Make sure you don't put all your money into one specific area! Most inexperienced investors are easily attracted to put most of their money in a certain investment, generally a one which is hyped by the market.
But, if you want to diversify your investments, then you should understand where you are putting your money. Invest in different types of areas, analyze the market and choose the best options that suit your kind of investment.
2. Diversify Consistently
Your investing strategy should be as simple as possible. This way you can keep the process going! Specialists agree that one of the best strategies is dollar-cost averaging. It actually is a must if you have a long-term horizon for your investments. This means you will be investing on a consistent basis no matter what the market is doing. This way, your portfolio will keep it's balance without depending on how high or low the market is.
3. Keep Your Diversified Portfolio Balanced
Your portfolio can easily get unbalanced when your investments payout investments or shares appreciate. So, if you want to keep on track for your goals, then you will need to frequently check your portfolio and make sure your choices are properly balanced.
4. Know When You Need to Sell
Having a diverse and balanced portfolio doesn't mean you never should sell some part of your investment. Take a close look at your strategy. Ask yourself if it fits your goals. Not everybody is OK with consistent investing! Besides, not every investment works out the way you wanted. You need to keep up to date on your investments and analyze closely when it's time to cut your losses!
5. Pick Variety Over Quantity
As mentioned previously, you'd like to invest in different types of areas when you diversify your investments. The thing is you always need to pick variety over quantity.
Diversifying investments doesn't mean you invest as much as possible in several markets. It's actually about investing in a manageable variety of assets based on your investment goals.Take your time to learn about diversifying your investment, you can even turn to a financial planner to analyze your options. Remember, choose wisely! It's your money after all.
SIX STEPS TO OPEN YOUR FIRST INVESTMENT ACCOUNT
Not everybody knows how to open their first investment account. If you are about to open this kind of accounts, then you should know some essential points. The most important thing to know is which are the options and benefits every investment company offers. Without all the information you won't know which option suits you best.
This is the main aspect you should analyze before opening your investment account. There are account maintenance fees, rollover fees, management fees, etc. Every company has them, so you should start by eliminating those with the higher fees. The ideal fee does not exceed the 5% and a higher average may not seem that much at first, but it definitely will be over the years.
2. Type of Funds and Accounts
Before choosing your investment accounts you should analyze every option available. You should get to know all the types of funds and the type of diversification they offer. The companies will also give you insight of returns, the stocks involved in index or mutual funds, distribution of dividends, etc.
3. Check the Company's History
Before you open your account, you should investigate the history of the company you've chosen. Check how long they have been in the market, if they received several negative references and if they have a shady background. Make sure you trust the financial company that is about to handle your investments.
4. Transfers Time
Although it's not essential, you should pay attention to the amount of time the money transfers take. This will be an important point once you are ready to jump on some bonds or stocks, or when you want to move your money back to your bank accounts. There will obviously be a delay, but it should not take longer than 2 or 3 days.
5. Security Options
Cyber security is crucial to ensure your money. So you must take precautions! Make sure that the financial company you choose grants strong cyber security measures, like tokens, text alerts or thumb ID.
6. Customer Service
Ask the financial companies how their customer service works. They will be the ones who will help you out when you need special advice, so make sure you chose one that counts with experts in finance in their staff.