Learning the basics of investing isn’t all that difficult. You’re determined be smart about your investing decisions, you’ve done the research, you’ve learned about the different types of investments you can make, and you’re ready to stop learning and start acting. What do you do first? How do you protect yourself and safeguard your investing success?
Step One: Accept that There is No Net
Here is the hard truth: there is nothing that you can do to absolutely guarantee that every single investment you make is going to perform well and earn you lots of money. Investments often depend on how the market does and, as the market is comprised of millions of people making decisions all at the same time, the market is volatile and hard to predict. Some of the investments you make won’t go well. Some will go very well. Accepting this truth now will save you hours of stress and frustration (and, likely, money) later on.
Step Two: Find Someone Who Knows What They Are Doing
Some people choose to hire one financial advisor and allow that professional to manage their entire portfolio. Others choose to work with several different brokers based on the individual investments they want to make. The direction you choose here is up to you, but whichever road you take, make sure you hire someone who knows what they are doing. According to 24option, “Creating a safe and secure trading environment is in the best interest of all involved and stringent financial protocols ensure that you receive the security you need to invest with confidence” This means that if you want to try your hand at binary options, work with a company that specializes in binary options or choose a financial advisor whose experience extends to this area.
Step Three: Accept that the Research is Never Truly Over
Yes, it’s important to do your research before you make that first investment. It’s good to understand how stocks and bonds work and learn the vocabulary of investing. It is also important to know that your research is never going to be done. Yes, you can hire someone to manage your portfolio, but you need to check out that person’s background and make sure that they are qualified to manage your money before you hire them. Even after you verify this information, you will want to do your own research on each of the investment suggestions your portfolio manager suggests so that you can make an informed decision on how to approve (or not) those suggestions and requests.
Step Four: No Investment is Forever
Investing isn’t like a direct deposit savings account. You don’t just “set it and forget it,” trusting that your portfolio will grow of its own accord. It’s important to know when to buy and sell, and how to predict when one of your investments is due to go south so that you can get out of it before you become part of its failure’s collateral damage. It’s also good to know when something has the potential for huge profits. For example, don’t you wish you had bought into Twitter in the beginning? Sure, you might have had to sell off another investment to buy in, but it would have been worth it, right? Knowing how and when to do these things requires practice and constant attention. Get used to tracking your portfolio. Don’t wait for an emergency.
Step Five: Gamble Responsibly
Investing is a gamble. Make no mistake about it. And, like traditional gambling, playing the market can become addictive. Go slowly. Be careful. Never invest more than you can afford to lose. This is where hiring a great portfolio manager becomes imperative: you need someone who can tell you no and–this is important—whom you will listen to when they do.
Investing can be a great way to solidify your financial future and, if you are smart and practical about it, you should be very successful!