Become an experienced investor
From conservative protectors to radical speculators, most agree that a sound and long-term financial plan needs to find a way to grow money.
Like most financial decisions, there is not a single, best way to do it. Being an experienced investor means knowing yourself-your goals, your motives, your fears, your limits.
This guide will help you understand these things and how they are combined with the basic principles of investment.
Mastery of basic knowledge You may be familiar with the terms of the investment community, or at least have heard the word before. Stocks and bonds. Raw materials, real estate and currencies. Brokers and robber-advisors. Active and passive. It is not necessary to be an expert in all these concepts to be a good investor.
In fact, the moment you feel that you “know enough” to invest, you may be watching with fear and losing potential profits.
This fear can manifest itself in many forms: fear of risk, fear of loss of mobility or fear of making wrong decisions. For example, Gallup data showed that only 37% of adults under 35 years of age invested in the stock market in 2017 and 2018. This is significantly less than 52% of investors in this age group from 2006 to 2007 .
It is understandable that the financial crisis has clearly damaged the confidence of the majority in the market. But while older investors (35 years and older) are still in the portfolio, the money of young investors has not entered the stock market. The two groups agree that stocks are the second best long-term investment after real estate, but only one group has invested heavily in stocks.
why? Fear is not the only driver behind these numbers, but it can explain a lot. Young Americans only see the effects of a major recession. Older investors have also experienced ups and downs before, so many of them insist on investing in the stock market. And, as the Gallup report notes, “this approach seems to have paid off.
Taking time to self-study can help dispel the fears of many investors or potential investors when making financial decisions.
Form a strategy The next step involves setting goals and using the knowledge you have learned to develop plans to achieve them.
It is different for everyone, although it is important to follow the old investment advice of “follow until the end”, which does not mean you can never change your mind. This guide describes the various policies that you can choose. When your goals change and you know more about what works for you, you can change gears and try different strategies.
Do not skip the study’s investment method just because you think you may not be interested in investing now.
Learn to adapt. Overconfidence, such as fear, can damage your portfolio. Even if you want to play a less positive role in your investment, you still need to evaluate the effectiveness of your plan from time to time. When reading this investment guide and strategy, do not forget the general direction: you have to resist a recession at some point, and what works for you at the age of 30 does not necessarily make sense at the age of 60. As an experienced investor, Learn now what you need to do later.