Smart investing is not just in the domain of investment gurus, hedge fund managers and Wall Street veterans. It’s in the field of achievement for everyone dedicated enough. You need to understand what makes investments tick. Take advantage of available information to improve their portfolios as well.
Over time, a few principles have emerged. Successful investors worldwide use them to improve the yields and income from their investments. Investing like a pro is easy. You just need to follow a few basic, established and proven principles. The following are ten of the best kept secrets.
Keep It Simple Stupid
Investment jargon is complex enough as it is. From CFD’s, EFT’s, to others that keep popping up every day. It is easy to get drowned in the jargon chasing the latest fads in the investment scene. Investment pros however invest only in financial instruments and stocks they understand.
Choose wisely; go with an investment you understand. Index funds are a smart choice. They are not only easy to invest in; they also have lower transaction costs and adhere to a principle long recognized by the pros. You can’t beat the market. Index funds provide diversification of your portfolio as well.
Invest With a Plan
Benjamin Franklin said, “If you fail to plan, you are planning to fail”. So it is with investments. Plan your investments if you wish to invest like the pros. Include your guiding philosophy and risk tolerance in the plan. Follow this plan whenever you make an investment decision.
A plan eliminates emotion from investing decisions. It guides you in following principles and reason instead. Greed and fear, the downfall of many would be investors are thus banished from your investing.
Research, Research, Research
Research is a key cornerstone to investing like a pro. Observe the successful investors worldwide. You realize their success is as a result of exploiting information they uncovered that gave them an advantage.
Information is power when it comes to making investment decisions.
The more you know about your potential investment, the more you can make a reasonable decision and profit from it. Pros go to great lengths to understand their investments, you should too.
Habits and Personal Discipline
Warren Buffett, the legendary investor, has stated it time and again. Investment is less about the money and more about our habits and personal discipline. It’s not even about intelligence or superior resources.
The pros exercise caution and control their emotions when making investment decisions. Develop the right habits and discipline to follow your investment plan and philosophy. Chances are that you will succeed as well where others have failed.
Take the Long Term View
The best holding period for an investment is forever as Buffet fondly states. Take a long term view. It ensures you aren’t affected by the daily shifts in investment values, politics and major events. It’s a known fact that in the long run, most investments, well managed, will appreciate in value.
Most investors however are in to make a quick buck and end up losing their hard earned money instead. Short term views also blind most investors to long term trends that may prove profitable in future. Pro investors take the long term view and have the discipline to wait out their investments.
Track your results.
What gets measured gets improved. Investing pros track their performance consistently and use it to improve their later transactions. So should you. Tracking performance reveals areas you are performing great and areas that need improvement.
It helps you tweak your strategies to what is working for you thus solidifying your gains over the long run.
Investing isn’t complicated. As demonstrated by investment pros time and again, simple does it. You can reap from their philosophies and transform your investment portfolio to something remarkable. Follow these effortless principles, keep a level head and you are on your way to the successful pro investor league.