Tips for beginner investors

Tips for beginner investors

Investing is a very rewarding journey.It has also been established that not too many people know how to go about it. Below are some tips that will help you along the way.

Start investing now – The sooner you start to invest,the better for you.Time is most definitely the investors best friend,since it gives compounding time to work its magic.

Invest regularly – Investing is not a once off thing,it is something that you continue doing throughout your life.

Don’t borrow to invest – Many people fall into this trap,only invest what you can afford to lose.

You are buying a company,not just shares – A share performance is dependent on the company,which in turn is dependent on the environment in which it operates.This includes its industry,the general economy, politics and its customers.

Buy shares in a company making a profit – If you buy a share in a company not making a profit,you are investing,you are running a risk.

Diversify your share portfolio – Spread your investment across different companies and over different sectors.The biggest risk in investing is putting all your eggs in one basket.The easiest way to diversify share investments is through unit trusts and exchange traded funds.

Don’t buy on hot tips – Do your homework before investing in a company.

Don’t try to predict market moves – Trying to predict the direction of the market is difficult,even experts are not always accurate.

Buy and hold for the long term – Continue to monitor your shares during this period,but consider selling your shares if general economics have changed or if the value of your shares is not appreciating.

Be patient – Investing for the long term will let you ride out the unavoidable ups and downs of the markets.

Categories: Financial tips, General