You might’ve heard people say invest in gold, invest in property and a lot of different things. Now days earning money isn’t as big of an issue as investing it is. Making good investments is the key to ensuring a secure future. With the ever-changing trends in the market it can be quite confusing to decide where you want to invest your hard- earned money. That’s where we come in, we’ll give you 10 tips to help you make smarter investments.
1.Understand what Investing is
To be a good investor you need to know what investing clearly is. It is commonly confused with saving. While the two go hand in hand they’re two very different concepts. Saving is for smaller, short- term goals such as buying a car. Whereas investing is for long term goals such as retirement. Investing carries high risks but also has great benefits if done wisely.
2.Housekeeping
Before you make an investment, deal with all the financial issues at home and put them in order. Prepare a plan of the expenses, and free up a fixed amount of money for investing on a regular basis. Create an emergency fund that covers living expenses for a certain period, also buy the right insurances to cover any financial damage that may occur in the future. This helps protect your investments.
3.Have clear Goals
For maintaining the drive to do anything you need to have a fixed goal. In this case you need to be clear on why you’re investing the money. It could be for a luxurious life post retirement or covering your children’s tuition fees. Once you know why you’re investing the process becomes much easier. It is essential to prioritize your goals and discuss them with the people who matter to you.
4.Measure risks
Along with understanding the risks of investments and each asset you also need to be sure of how much of a risk you’re willing to take on them. You need to identify your risk tolerance as it affects your investment goals, the amount of time you must invest and various other factors. Many a times investments keep you up all night and you need to be sure you’re up for it.
5.Check your History
To be a smart investor you need to hold realistic market expectations. It is important that you know the history of the stocks you’re investing in and understand how they fluctuate. The average returns are not indicative of a fixed performance per year as they can fluctuate. These fluctuations can be kept in your perspective by knowing the history of the average returns.
6.Note it down
Having a written plan is always beneficial. It is formally known as an investment policy statement. It keeps track of the times both good and bad and helps in discarding ideas that don’t agree with your circumstances. It also keeps check on the performance of the investments you’ve made.
7.Stay Calm
Being nervous really doesn’t work in this scenario. To ensure market gains it is essential to stay in the market during its bottom time see more gains. Investors who are nervous usually stay on the side lines while the market is down or till they feel it is rebounding and miss out on major market gains.
8.Invest Regularly
A smart investor always invests regularly. The risks of the market often compel investors to judge when to be in and when to be out during up and down markets respectively. But it is almost impossible to time the ever-fluctuating market. Hence, it is suggested that you invest regularly and not depending on the markets situation.