Invest Like A Pro|Avoid Blunders
If you want to master investing you need to avoid financial blunders. That may sound hard to do, but it’s not. You just have to be aware of what these blunders are, then you can work on avoiding them.
Financial Blunder #1 – Investing Without A Good Navigation System
Before you invest you must have an investment plan; investing without it is a common financial blunder that investors make. Your investment plan is your financial navigation system. Investing without a good navigation system is like going on a trip without your GPS system.
To get the best performance out of your investments you need to have a direction. (Hot Tip: that direction comes from your investment plan).
If you do not have an investment plan and collect investments like butterflies based on pretty colors and shapes, your portfolio will be a collage of investments and look like a butterfly collection. When you follow an investment plan, you will have a diversified, structured financial portfolio.
If you do not know where you want to go, how will you know how to get there?
Your investment plan includes investment goals. Have you detailed what your investment goals are? Do you want to retire early, send your kids to college or pay off your debt and be debt free? Each one of those goals will require a different approach, which is why you need to detail your investment goals.
Financial Blunder #2 – Investing Without Basic Money Knowledge
Investing takes time, knowledge and some say a bit of luck. Time and knowledge you can control, luck you don’t. Be a smart investor, rely more upon your knowledge than your luck. Learn about the basics of money and investing. Learn the differences between mutual funds, stocks, bonds and cash equivalents. Learn as much about the basics of managing your money as you possible can. And by all means, do not rely upon financial hot tips to be your educational system; hot tips will lead you off track every time.
Financial Blunder #3 – Invest In What You Know
Do not avoid investing because you fear it. Some investors do allow their lack of knowledge to paralyze them and they stop investing altogether. To ease your fears about investing only invest in what you know.
If you do not completely understand annuities, before you invest in one, learn about them. If you are comfortable with mutual funds, then just invest in mutual funds. If your comfort level of risk is low, that’s okay, stick with investments that are low risk.
You can become a good investor, you just need to start with financial basics before moving into the advanced category.