5 Keys to Investing
5 Keys to Investing
Everyone loves the idea of investing, but most people are too scared to even try. After all…its basically gambling. Even though many people think investing in the stock market is like gambling, it is by far a safer way to grow your income verses the roulette table or Black Jack. You can learn to invest wise and cautious, and not blow your children’s college fund.
Inspired by our friends at Kiplinger, here are 5 keys to investing:
Make Investing Part of Your Daily Life
As we have said before, investing in the stock is a whole different world with a whole different language. The only way a person can truly learn this culture and learn the language of the stock market is to spend time with it every day. If you have a desire to become a real trader, then it is time to make investing a part of your daily life.
We all have our daily rituals and routine. Many of us wake up, check our emails, shower, make coffee, read the newspaper, and head to work. For others, they wake up, work out, meditate, shower, and head to work. But what if we were to block out a short period of time in the morning to direct our brains and our eyes to the world of the stock market. What if we spent a little bit of time everyday listening to podcasts about investing, reading blogs, watching the market, or even having serious conversations with people we know who are a part of this culture? We would shortly become a trader by nature.
For anyone who is ready to start investing the stock market, it’s time to ask the question, “How serous am I about this?” This can be the determining factor of you making a profit or coming up short.
Create Realistic and Ambitious Goals
Many people think they can make a fortune overnight. This is rarely true, despite the small percentage of lucky folk. If you are serious about becoming an adequate trader, you must first set yourself some goals.
Short Term Goals
Small victories are still victories, and they can set you on a course for confidence and even greater victories. You must first start with short term goals. How much money would you like to make this month or this year? Maybe you start with $100 and make a goal of doubling it. This can be great practice. Maybe you would like to start with $5,000 and break even over the first year. This is also great practice. Setting short term goals will help you learn on the playing field, without jumping straight into the NFL. Are you following?
Many people like to ask the question, “What is your five-year plan?” This is a good question, because a great goal or achievement often takes five years or more, and maybe less if you’re lucky. Asking yourself the same question, “What is my five-year goal for investing in the stock market?” is an important question to ask yourself before you dive into the water. Your five-year plan may be to make $10,000 at the end of five years or maybe $20,000. This is only up to you but can determine how you engage with the stock market on a daily basis and help you decide where to invest carefully.
Finally, setting a ten-year goal is a really important goal to set while starting out as an early stock trader. This means you have planned on being in the game for the long haul and will most likely commit to truly putting gin the time. They say people who start businesses with a ten-year goal often find success verses the companies that want to make it big in the first year. Slow and steady the wise monk once said. This is major sub key in the 5 keys to investing in the stock market.
Don’t Gamble All of It
Have you ever been to a casino and watched someone continue to lose over and over again, only to run to the ATM to get more cash? This is a sign of danger and addiction. Like gambling at a casino, investing in the stock market can be dangerous if you are unwise and let the power of it take hold of you.
We mentioned earlier about your daily routine. Perhaps a little bit of meditation and then stock market learning is a good balance to keep you steady. While we all want to profit and achieve big, we must not do it to detriment of ourselves and our families. Don’t gamble it all. Start with any excess cash you may have at the end of the pay period. Start with pulling just a small amount from your savings. Start with drinking less coffee and putting that into your investment bucket. There are many ways to invest wisely and many strategies on where to start and how much to start with.
Time Is Your Best Friend
Many would say that time is a greater commodity than money. Time and money go hand and hand. You can’t make money without time, and you can make much more money if you use time to your advantage.
While there are many day traders, this is usually for the well-equipped, a wise way to invest to find a few companies you have studied and have faith in. Buy some shares and forget about for several years, while peaking in every once in a while. Many would tell you they have made larger profits by being patient and waiting verses getting antsy and making poor choices.
As you have seen, many of our keys have been about preparing yourself before you start to invest, but for our last key, we want to encourage you to diversify your portfolio. Diversifying is one of the best things you can do in the stock market. The truth is, no one truly knows which companies will tank and which ones will succeed. While there are always trends and clues, the best thing to do is to find a few trending markets and buy into a bunch of companies at a good price. All it takes is one to go huge and you may just make a fortune, but we never know which one will. We must always use the balance of wisdom, patience, education, and diversification to protect ourselves and we will hopefully receive profit.
We hope these keys have encouraged you and have inspired you to start investing. If you still don’t know where to start, you can always find us at LVGI on the OTC Markets. If you have any questions, please contact us today.