Smart investors are constantly educating themselves so that they can make educated investing choices. (Makes sense, yes?) With that in mind, and with very little hyperbole, today’s blog brings you some of the best investing tips from around the net. Enjoy.
1) Choose a scientifically based investing strategy and stick with it
Here’s a fact; nobody knows what the future’s going to bring, especially with the stock market. Predicting a crash? Practically impossible. Your best bet is to pick a strategy that works for you and simply stick with it. In the long run, statistically speaking, you should do just fine
2) Don’t react to the stock market, good or bad
Many investors make the mistake of letting their emotions force their investing decisions. As the market moves up, they feel great about their investment decisions but, when it starts to go back down again, their fear and anxiety get the best of them. Unfortunately, they make decisions based on both their positive and negative emotions and lose both ways. This is called “reactive investing” and can oftentimes lead to very poor decisions at the worst possible time.
3) Ignore the hype, and the doomsayers
These days it can be quite difficult to stay disciplined as an investor, especially when the financial news is chock-full of daily crises. This information, much of it invented, encourages both short-term thinking and trading. (Not good.)
Ignoring the hype and investing in a globally diversified portfolio of stocks that are tracked by the MSCI Global Equity index, and then completely ignoring financial news of any kind, is a much better strategy. In fact, every dollar that you invested in 1970 following this exact scenario would be worth $36 today. (The MSCI tracks the returns over 75 countries, and their markets, around the world.)
4) Don’t Focus on the direction of the market but rather on capturing excellent returns
As we mentioned above, nobody can predict the direction of the market or, for that matter, correctly pick outperforming stocks or fund managers on any sort of regular basis. For that reason you should instead focus on creating a well diversified portfolio that will allow you to capture excellent returns from markets around the globe.
5) Don’t invest everything in the S&P 500
If you only take one bit of advice away from this blog today it’s that you need a well diversified portfolio. Concentrating on one market, one country or one type of stock is extremely risky.