What 50 Years Of Investing Taught Me, Plus How To Reduce The Risk

A lot of people would like to invest in stocks, but it shouldn’t be done on a whim.

In order to get the most out of the time and money you put into stock market investment, take a look at some good investing advice before you get started, hopefully my 50 years of active investing can help you.

I don’t proclaim to be like Warren Buffet (Wikipedia link in case you’ve been living under a rock) however I’ve made a nice nest egg that kicks off dividend and residual income as I’ve retired so I know a thing or two.

Set small, reachable goals when you first start investing.

It is common knowledge that stock market success and overnight riches do not happen instantly, unless you do a lot of high risk trading.

High risk trading is something that no long term successful investor will ever do well. I’ve been subscribed to numerous trading systems over the years, the results were mostly terrible.

Watch the markets closely before beginning to invest.

Before you make your initial investment, it’s a good idea to study the stock market for as long as possible.

Prior to investing, try to follow the stock market for at least a couple of years. This will give you a much better idea of how the market actually works and increase your chances of making money. Then you’re not gambling!

Treat your stocks as if they are and interest in your own company, instead of just tickets to trade.

Dedicate the time necessary to understand financial statements and assess the pros and cons of companies you may decide to purchase. This will help you make wise stock market decisions.

You need to reconsider you investment decisions and your portfolio at least every two to three months.

This is due to the fact that our economy is changing on a constant basis.

Various companies may have become obsolete as certain sectors start to outperform other sectors.

What time of year it is might determine what you should be investing in. You must watch your portfolio and change it as necessary.

Timing the markets is usually futile. However a lot of this depends on the type of stocks you are going for. Sure timing regular blue chip companies will never be easy but timing things like emerging tech is key.

In 2018 I subscribed to a paid newsletter about upcoming tech investments. I was highly skeptical but as more info started coming out about 5G I was able to jump on a couple of 5G stocks early and ride the wave.

(Subscribe to people who send out updates on these financial newsletters, I managed get in early on a Jeff Brown 5G stock tip and have made over 1200% in 3 months – not a guarantee but up-coming tech is big)

Keep your investment plan simple if you are just starting out.

It can be tempting to diversify right away and try everything you have read about or learned, but if you are new at investing it is best to find one thing that works and stick with that.

Index funds are a good start. That’s where I started off and build a solid portfolio. In fact I did this for years and still invest in index funds.

Set aside funds for more risky investments. The 5G investment I made was for my higher risk trades, but ones that make sense.

As a rule of thumb, someone who is new to stock trading should begin with a cash account instead of a marginal one.

It is less risky to start with a cash account because the losses can be controlled. These accounts are also best for an initial education of the market.

Look for a stock market investment strategy that works well for you, and stay with it.

You might prefer to invest in businesses with plenty of liquid assets, or you might look for companies that pull in high profits regularly.

Whatever your strategy is, only use it if it’s working.

As I already said, index funds are your go to if you just want reliable long term growth.

Constantly review your portfolio.

The stock market is appealing for many reasons, and the temptation to enter it is a great one.

However, make sure to become educated so you can make wise decisions.

Whilst I don’t recommend every stock market guru under the sun as the vast majority are crooks, you can do research with BizReviewed who review stock market newsletters daily.