We have outlined the top secret investing tricks that the pros use in 2019! This article contains advice for investors that you need to know about!
About 54 percent of Americans invest in the stock market, and for good reason. Since 2014, the wealth of families with a stock portfolio has risen to over $344,000!
What’s more, it’s not just the stock market that’s delivering tidy returns. Even the real estate market is getting hotter after the Financial Crisis of 2008.
However, as much as the numbers tell a rosy story, investing isn’t an easy task. In fact, it’s a game of tact and patience; otherwise, losses await.
If you’re a newbie, you might not know where to begin. That’s why we’ve put together this advice for investors.
Keep reading to learn the top tips for being a successful investor.
1. Nurture Your Passion for Investing
A common mistake many newbie investors make is entering the investing world for the wrong reasons. If your sole motivation is to make money and get rich quickly, investing isn’t for you. If you’ve got no passion for the markets you want to put your money in, you’re best advised to try elsewhere.
A successful investor is someone who's passionate about investing. They appreciate the fact that investing isn’t about getting rich as soon as possible. It’s about increasing wealth over several years.
As such, it helps to nurture your passion for investing before you even make your first investment. Start by reading books and magazines about investing. Identify a couple of successful investors and read their stories.
The greater your passion for investing, the more likely you’re to be in it for the long haul.
2. It’s Never Too Early to Start Investing
Younger people (hello millennials!) aren’t investing. A recent Gallup survey established that more than 50 percent of all households led by people who are younger than 35 don’t have any investments.
Yes, there is the issue of lack of adequate disposable income, but most probably think they are too young to start investing. What a lame excuse!
To know that you aren’t too young to start building your investment portfolio, look at Warren Buffett. He made his first stock purchase at the tender age of 11. And if you think you’re too broke to start investing, note that Buffett’s first investment was worth about $100.
Of course, $100 back then doesn’t hold the same value as today's 100 bucks, but you get the point. You can practically start investing with as little as $5. Plus, investing while young helps you nurture that habit.
3. Diversify Your Investments
The old adage “never put your eggs in one basket” couldn’t be more apt.
Diversifying your investment is an effective risk management strategy, especially if you’ve invested most of your money in the stock market.
To illustrate this, consider the stock market crash of 2008. The Down Jones Industrial Average fell 777.68 percent in a single day. Investors who were caught on the wrong side of the sell-off lost significant sums. Some lost their entire life savings.
It is instances like this that make investment diversification necessary. People who had invested in other markets, such as real estate and bonds, definitely had a softer landing. So when you start out as an investor, ensure your strategy involves investing in diverse markets or industries.
4. Work With an Investment Professional
Regardless of how much you learn about investing, you might never attain the competence of a certified investment professional. This is why it’s highly advisable to seek the professional advice when you’re beginning your journey as an individual investor.
Sure, these professionals charge a premium for their services, but they offer you the clearest path to success.
You see an experienced investment professional lives and breathes investing. This is what they do day in, day out. They have an exceptional grasp of various financial instruments as well as investment markets. With such a professional on your team, you can rest assured you’ll make shrewd investments.
5. Leverage the Power of Technology
Investing has come a long way, no doubt. Back in the day, to buy a stock you had to physically visit the office of a stockbroker and fill out some paperwork. Today, you can trade stocks from the comfort of your own home using your smartphone or computer.
As a New Age investor, you have to leverage the power of technology. Besides technologies that enable you to invest, there are others that help you make sound investment decisions. For example, investment apps provide you with insights and forecasts that’ll enhance your understanding of the economy and its influence on various markets.
That said, don’t over-rely on technology. After all, much of the information on these platforms is created and published by people with diverse views and opinions. Always remain objective and make decisions only based on facts, not opinion.
6. Capitalize on Opportunities to Save Money
Investing has its fair share of costs.
For example, if you’re a real estate investor, one of the costs you’ll face is a tax on capital gains. If you purchase a property and sell it at profit, later on, you’ll typically have to pay a tax on the profit.
But that isn’t always the case. There are strategies you can use to defer or lower the tax, such as using a DSTS in 1031 exchanges. This gives you the opportunity to avoid paying the tax immediately your sell the property, as long as you use the gains to make another investment.
Put This Advice for Investors to Good Use
Investing is your path to wealth and financial freedom. However, depending on your strategy, this path can also lead to financial ruin. With this advice for investors, though, you’re in a good position to make sound and profitable investments.
Keep browsing our blog for more investment tips and insights.