Daily Tips On Investing
By Shivangi Kulshreshtha
Entering the world of investments is a gamble for everyone. It is only natural to get anxious or frustrated with the constant changes in the market. Even if you have started investing already, a lot of obstacles could still come your way over the duration of these investments. Here are a few simple techniques that could help you gain maximum returns:
1. Diversify 🔆
Instead of making big investments into just one company, it is better to split and diversify your investments into various small, potential companies over a period of time. Having such a balanced mix of investments can help secure your overall position with reduced risk from individual successes and failures. Essentially, you will be investing into different things that would react differently to the same event, potentially minimising your total losses.
2. Regularly evaluate your investments 🔍
You should constantly evaluate your investments to see how the shares you have invested in are doing. If you see that a particular share is performing poorly and feel that it would not get you enough profits in the future, then it is best to sell it. You should always be aware of your shares’ position and what the market situation is like at any point to be aware of where your money is really going.
3. Stick to one strategy 📌
Just like how the great Warren Buffet stuck to his value-oriented investing, it is advisable to pick an investment strategy that you think suits you best and stick to it as much as possible. Experimenting around with investment philosophies even after you have arrived at a profitable method, could land you some unnecessary losses. While there are a million different strategies out there that you may want to try, picking a strategy and becoming proficient at it would be the easiest way for you to make money out of your investments.
4. Drive investments from the future ♟
Pin down your desired future as the constant focus point for your investments to gain direction. Placing future goals for yourself can help you start working towards it by tweaking the present. You should also look at the potential of the investments that you plan to make in the future. If you think they would turn out profitable in the future, then it is best to buy them.
5. Invest for longer periods 🕗
While you want to make quick money, it is best to invest for a duration of more than 5 years. This is because long period investments let you enjoy much higher returns for lower volatility, than short term investments. Volatility is basically the degree of changes that prices undergo over time. Long time investing is known to show relatively greater success rates and lesser risks than short term investing.
6. Be open-minded ✳
Do not let your investment decisions be influenced by the stereotypes of ‘small companies’ and ‘big companies’. A lot of small companies have the potential to become the Berkshire or Google of tomorrow.
7. Be patient 🙂
If you are a beginner in the field of investing, then you need to be patient and understand the game thoroughly. You need to grasp how the market works and how you can get the best returns from your investments. You should take your time and evaluate the pros and cons for each investment option. Be as inquisitive as a child, but keep in mind that not everything that you sow you can reap.
8. Keep calm 😌
For the most part of it, market is a mechanism running on a cycle of its own ups and downs. Stocks can move both upwards and downwards and you need to take care to make well thought out, rational decisions despite these fluctuations. Trust your instincts and retain the investments you believe in, even if they may yield zero returns today.
Investing can be quite a gamble at first, but it becomes a much easier game when you start trusting your intuitions, actions and strategies.