Tips I wish I knew when I started investing
Taking the first steps into the investment world can be a very scary and daunting endeavour. Below I will be sharing some tips that I wish I had know when I first started investing (aside from buying Google or Afterpay before share prices sky rocketed).
Don’t try to time the market perfectly
All too often people expect that there will be a large buying opportunity just on the horizon, waiting for the perfect time to enter the market at a cheap price, but before the know it prices have continued moving onwards and upwards, missing the real opportunity that is in front of them. Trying to time the market perfectly can result in missing on opportunities rather than finding the perfect one. Time in the market, beats timing the market.
Don’t listen to the ‘experts’
Whether it’s the friend that has the inside word on a particular stock or the other friend that promises that the property market will crash shortly, there is rarely any truth behind this. Listening to all the so called experts will using lead to making investment mistakes, base decisions on your own research, understanding and fundamental investment principles.
You can monitor your investments too closely
Many first time investors get too caught up in monitoring their investment positions every minute of the day. While this may be something that can be of benefit to high frequency traders, this will usually result in unnecessary anxiety for the regular investor and this can lead to making investment mistakes. Which brings us on to the next point:
Basing investment decisions on emotion
All too often people will make investment decisions based on companies or investments that they like or have been appreciating recently. Similarly, most investors will sell an asset that has recently declined in price based off fear. Investment decisions must be made rationally, not based on emotion.