The Basics of Investing
Investing is a great skill to know. Whether you want to put some money in the stock market, or just want to plan for a child’s college tuition fund, investing is the answer. There are so many options available for investment, from the stock market to saving money in a bank account, that it can be difficult to know where to start.
According to Jordan Sudberg, investing is simply calculating how much you need in the future and how much it will cost to get there. It’s about making reasonable guesses about the future which will help you invest for your future.
Remember that you can get a head start on investing by saving early in your life. Having a large sum of money in the future will be easier if you have been saving from your youth. It might be hard to start with a small amount, but think about how far each investment will go for you because of compound interest and the power of time.
Here are some investing tips Jordan Sudberg gives to help you get started on your journey to investing success.
1. Research before investing.
Research is the key to successful investing. Before you put any money into a company, do your research and make sure you’re making the right decision. Read all of the information that’s available about that business or investment, and make sure you understand it. Don’t invest in a company that you don’t understand, as all investments will be affected by the success or failure of that company. If a company has not yet proven itself, then stay away from the stock of that company until it does.
2. Understand the risk.
Understanding the risk involved in your investment is important. If you are letting someone else manage your money, then you need to understand that they might make mistakes. On the other hand, if you are managing yourself, then only invest in things that have a high success rate. It’s all about understanding the risks and rewards of each potential investment.
3. Keep your eye on the big picture.
Don’t let any one investment fall below a certain percentage in your portfolio, or make up too much. If you are investing in a company that is doing well, then let it do well and stake some money in it. But don’t get spooked out of your investment by some bad press or news story, or panicking because the stock dropped a little bit. You should have an investment plan that includes a time period for each potential investment, and stick to it.
4. Diversify your investment.
Investing should not be a single focus. If that company goes out of business or doesn’t succeed, it will have a negative effect on your portfolio. Instead, have a small part of your money in several different companies, so if one goes down, you won’t lose everything.
5. Keep track of your investments.
There are many different ways to keep track of your investments and figures regarding them. You can use a spreadsheet, computer program or even an Excel document. Whatever method works best for you is the one you should use. If you want to keep track of your investments but don’t want to take the time to do the research yourself, then pay a good stock broker to take care of it for you.
Buying stocks can be a daunting task and can be frightening to even the most experienced investor. But if you do your research, understand the risks and don’t let emotions affect your investment decision, then you should have no problem investing in the stock market.