Tips for Investing: What Not to Do

Investing money is not something you want to take lightly. People who go in unprepared and not knowing a thing about the markets or different types of investments tend to lose their money quite fast. Today, we would like to share some tips on what you shouldn’t do when you start out with investing. These tips are also valid for seasoned investors who may forget the what-not-to-dos.

Don’t listen to just anyone – Lots of people have a lot to say about investments. Many of those people probably don’t know the first thing about it and they probably don’t have any investments of their own. You should be careful about whose advice you listen to. The guy at the pub with a few beers is probably not a good bet. A respected website like this one is a good bet.

Don’t buy shares without careful consideration – There is a sort of unspoken rule that says you should think about buying a share for about 30 minutes before clicking the button. This gives you enough time to research and weigh the pros and cons. You can’t un-buy a share. So, be sure that it is the right share for you before you buy.

Don’t invest money you need – You should never invest more money than you can afford to spend and lose. The money you invest should be extra and must not endanger your and your family’s ability to survive.

Don’t get spooked – News will update regularly and things will happen in the markets that may be unexpected. Don’t listen to everything on the news or other people freaking out. You know your investments and you should know when to stay and when to get out. Don’t allow mass media and unfounded stories spook you into doing stupid things.

Avoid these actions and you should be relatively stable with your investments. It is important to remember that there is no such thing as a sure thing when it comes to investments. Keep an open mind and learn as much as you can and always keep your goals in mind.

How to Choose the Investment Type that is Right for You

One of the most important things to consider before investing money is which type is right for you. There are many different types of investments to choose from. Some are better for people who are just getting started and others are more for the seasoned investors. There are several factors that will influence your choice. It is important to choose the right one for you otherwise you may end up losing money instead of making money. So, do your research and consider the following when deciding which type is for you.

What are your investment goals?

What is the reason for your investment? Is it to save money and reach a savings goal? Do you want to help an up and coming business? Do want to invest money and leave it to grow so you can use it for retirement? These types of questions will give you the reason for investing. This will play a role in choosing the right type for you.

When will you need the funds?

The time-frame or horizon for when you will need the money is a big factor. Do you need the money in a few months or only in a few years? This will determine what type of investment you need. Some investment types and opportunities can offer immediate earnings and others take a long time to show their earnings.

How much are you willing to risk?

This is a big consideration. You need to decide how much money you have available to invest and how much risk you are willing to take with that money. You should never invest money that you cannot live without. There are always risks involved with investing. Some types carry lower risks than others and you will need to decide which type works for you.

These three questions will give you the answers that will point you in the direction of your ideal type of investment. You should do some research on the different types and ten weigh your answers to these questions. Choose the option that suits your answers best.