FVP Holdings
10 Keys to Smart Investing
29 Apr 2020

key to investing

Wealth accumulation requires a firm commitment to make your money work for you and make smart decisions. Follow these tips as you embark on an investment journey.

  • Be Realistic

Investing is not just about seeking the highest possible return. Thinking about your investment goals and making smart, realistic investment decisions will help you achieve your financial goals.

  • Follow a Detailed Plan

Make a plan to eliminate the urge to buy or sell investments. Write it down and set a date to review it regularly. Include:

    • Your investment goals and time frame
    • The return you need to meet your goals, and any income you need to invest
    • The type of investment that suits your goals
    • Your diversification plan
    • The risk you are willing to take in order to achieve your goals
  • Avoid Problems

Do your homework before investing and be comfortable with your decision.

  • Avoid Trusting Others Blindly

Before you follow any advice, think for yourself and research the expertise of those who offer it.

  • Avoid the Fairy Tales

If something sounds too good to be true, it probably is. If someone promises a high return on investment, there are red flags.

  • Avoid Relying on Past Performance

Choosing investments based on past performance is like driving a car with only the rearview mirror. Past performance is an achievement, not a prediction of the future.

  • Avoid Borrowing to Invest

If your investment doesn’t work out, you still owe the lender money. Instead, stick to your investment goals and set aside savings you’ve earmarked for investment.

  • Avoid Holding Only One Investment

Diversify. Market changes can happen quickly even before you start reacting. Diversifying your portfolio will help protect you during volatile markets and give you time to make informed decisions.

  • Avoid Flipping Stocks

Trying to “beat the market” by buying and selling stocks frequently is a losing proposition. In fact, nearly 82 percent of daily traders are losing money.

  • Avoid Getting Emotional

Having a plan and sticking to it can help you avoid mistakes and impulsive decisions.

 

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