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How To Be A Better Investor This Year

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If you are truly considering the work from home life – one of the best ways to make money is by investing. Investing money is the supply of cash to a service, product, commodity or company in the expectation that either a dividend is received, or a large profit is made upon the sale of the investment. Of course, you might have known that already – but it never hurts to check.

If you want to get into the world of investing, it could be an interesting year for investment. A lot of things affect the prices of other things – from wars, political upheaval, material shortage, weather and even elections. There have been some pretty big events taking place this year – from the Brexit happening in the UK to the office of Donald Trump in the States. Don’t get it twisted up; these things can and will affect investments. The decisions of politicians have big impacts on the prices and costs of items and companies we can invest in. Some companies succeed, and others don’t. Being a better investor means paying attention to what is going on in the world around you. There are plenty of things that can affect stock prices – they dont even have to be related! For example, look at how the stock of Nintendo rose when Pokemon Go – a game that Nintendo didnt even make – was released. Pay attention and be smart.

Becoming the best investor that you can be? It takes money. What if you want to get started in investing? Well there are plenty of guides out there that will help you, but it is never a bad idea to cover the basics. To invest youre going to need a pool of funds to invest with. Collating a pool of investing funds needs to come after youve saved up an emergency fund that will cover basic expenses. There is no point gathering investing funds if you find yourself in a housing or medical crisis that sucks money from you. The best way, and most intensive way to develop a fund is to start putting a third of your monthly paycheck away after expenses. So after rent or mortgage payments, commitments and food costs, you need to save a third of that leftover chunk of cash. This will allow you to develop money fast. Of course, it is difficult to put that amount of financial constraint on yourself, but money saved now will multiply over the years.If you can stick to a money-saving regime like the one described with discipline over a sustained period – youll have a good wedge of money that can be used to start seriously investing. Over the course of two years, this could be something that at bare minimum is five thousand dollars. Even if you are on a minimum wage, you could still stretch into the thousands with this method.

Being a better investor is revolves around your wisdom. How wise are you when it comes to making decisions? If you arent – then you need to learn how. The thing is, there has never been a better time to learn how to become a better investor. Why is that? Well – information, knowhow and investing tips and guides have never been more freely available as they are right now. From tomes on the subject and a pricing forecast to quick guides, information is quite literally at your fingertips nowadays. There exists no further excuse for ignorance and blind guesses when it comes to decision making in investment, because for every decision you make, there should be evidence backing it up. Wisdom also comes in the form of decision making in terms of your portfolio. If all of your money is invested into one area – what happens to your money when that area collapses? A property market bubble bust or a stock market crash could reduce thousands into hundreds and hundreds into tens in what seems to be an instant. If youre a wise investor, you either identify risk – or you diversify your investment portfolio so if one aspect of your investment portfolio is hit – there are others that are intact. Of course, investing is high risk and high reward, if you plant all your investment in one area, it is better for your return, but it is not as safe as diversifying your portfolio, but when you diversify, you may not get as high of a return. Its all about being conservative though, with so much that has happened this year already, it pays to be careful as who knows that might be the news that brings markets crashing? How do you diversify? Its simple – spread the wealth. If you have invested your money into stocks thus far, why not open yourself up to commodity trading, bonds, property and managed funds? You dont have to do it evenly – you might consider that putting half of your money into stocks while the other half is split over funds and bonds a worthwhile move. The diversification process is up to you.

To become a better investor, you need to stick to simplicity. There are all sorts of complicated investment processes and funds that offer high rewards through a diverse and complicated algorithm, that frankly you wont understand and it will get the better of you. Simple investments offer return based on simple factors – these are the investments that you need to stick to unless you are certain that you understand the more complicated investment processes. An example of a simple investment might even mean your own property. If you add a loft conversion, the cost of the loft improvement will be eaten up by the return of the investment gained upon sale. You owned one thing and did one thing to make a higher return on your investment. Even the smartest investors know that simple options are the best.

Being a better investor? It means saving more cash, sticking to tried and tested methods, being wise and educating yourself. It is easier to invest than ever before, but you know what? It is also easier to lose money.

 

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