Thinking of how to invest your money makes most people’s head spin. However it’s unavoidable if you want to achieve long-term financial security.
Here are 4 quick tips from Daily Worth about picking the right investments.
1. Stop Following “HOT” Stock Tips
Unless you’re dealing with financial professionals with a good track record of success, don’t pay much attention to the noise.
Following a “hot” stock tip from your co-worker or a brother-in-law can cause you to lose money fast. If a company has done very well, you may be chasing past performance. And if the stock is poised for growth because of certain market or industry conditions, check the facts with a professional or do your own due diligence.
2. Stop Using Your Pricey Investment Advisor
Now, I have 2 thoughts on that.
First one is you want to avoid people who will charge you an arm and a leg for advice and service that’s freely available.
However, if the advisor can assist you in picking the right kind of investments, provide good advice that’s not just mainstream, AND has a good track record of making money for his clients, than the returns will far outweigh the costs.
If you’re just starting out, and don’t have a lot of money to invest, I don’t think you need to hire anyone. But if you have a considerable amount of money to invest, interview a few advisors. Do some research and ask them to show you what THEY have done for their clients.
Most people never do this, but picking a good advisor and avoiding a bad one will go a long way in helping you create a big nest egg for your future.
3. Stop Obsessively Monitoring Stock Prices
It’s tempting to jump to conclusions when you see stock prices go up or down. Understand this is a long-term play. Markets are volatile and very susceptible to news and events around the world. However in the long run, it all works out, and short-term fluctuations don’t matter.
Good companies grow. Bad companies go down. If you have solid investments based fundamental research, no need to look at the daily charts, which may seem like you’re looking at a heart monitor.
4. Stop Trying To Predict The Market
Nobody knows where the market is going. Listen to 10 “experts” and you’ll get ten different opinions and reasons why they believe what they do.
Look for investments you’re comfortable with, and don’t worry about guessing where the market is headed next.