MONEY AND FINANCE

Learn About Investing and Finance

Learn About Investing and Finance

Investing and finance may sound like a world unto its own, but it can be mastered with relative ease. All one has to follow are 5 general principles. I say that based on my past experience as a stock broker, real estate broker and mortgage banker.

I am not bragging about my experience I’m saying these principles apply to all investing and finance arenas. All you need is the discipline to put them in place and then follow them.

The first rule is to pick a strategy and follow it. There are many ways to be successful in your investment field and no one strategy is inherently better than any other. Obviously different people will use different methods to pick stocks, for example, and fulfill their investing goals. The same is true for real estate, collectibles, automobiles, etc. Once you find your style, stick with it.

The second rule is so easy that it appears complicated. Always sell the losers and let winners ride out their course. The road to a guaranteed profit is by selling appreciated investments. The investment chosen really doesn’t make a difference. Stocks, homes, baseball cards, for example, all go up and down. You make your money when you sell high and buy low.

Another what I call obvious piece of advice is to never chase a “hot tip”. You should have more respect for your money than following something called a hot tip. When you make an investment, it’s important you know the reasons for doing so. Do your own research and analysis before you even consider investing your hard-earned money.

Rule number 4 says you shouldn’t sweat the small stuff. What do I mean by small stuff? Small stuff is activities such as short term ups and downs. Every market experiences ups and downs. Even government treasuries. Don’t step over dollars to pick up dimes.

Rule number 5 is a first cousin to rule number 4. Keep your focus on the future and adopt a long-term perspective. I think this is imperative because investing is really about trying
to make informed decisions based on things that have yet to happen.

It’s important to keep in mind that even though we use past data as an indication of things to come, it’s what happens in the future that matters most. The point is to base a decision on future potential rather than on what has already happened in the past.

I know I said there are 5 general principles but I believe in giving you more for your money. Hence, general principle number 6. Always keep an open-mind. All markets, like I said above, have ups and downs. All markets have cycles.

Your job is to force yourself from becoming narrow minded or focused solely in one arena. True investors realize there is potential in every market and structure their mind and not necessarily their portfolio to be aware of one market’s influence on another. This helps to maximize profits and minimize losses.

And, while I’m stating general principles, I’ll say not to orient your investments around taxes. If you do, you run the very real danger in making poor, misguided decisions. Taxes will take care of themselves. Your focus is to make so much money that your accountant will have to stay up nights trying to minimize their impact on your wallet.

You already know exceptions exist to every rule. However, the above investing and finance rules fall into the category of solid tips and common-sense principles. With so many websites offering information that is hard to sort through or even harder to understand you will find moneyferret.com is the best place to learn about investing and finance.

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