Many of us complicate investing and, as a result, fail to make a profit from our investments. This is often due to the fact that we don't truly understand investing. We try to follow the trends. We research what the best investments might be at the moment. We follow the herd or the latest fad hoping to get in at the right time. Often we are left in the dust, frantic to decide what our next move should be.
A more simple approach and one that is more natural in both planning and execution might suit you better. By stepping too far outside of your comfort zone with an investment you waste a lot of time. When you first find out about an opportunity it is going to take time to research the market, company or type of investment. You could just jump in with both feet but often this is a foolish move and money is lost. Researching and becoming knowledgeable about a certain type of investment wastes time and often once you are comfortable with the investment, that opportunity has passed.
In order to find more success and have more fun you might want to pick investments that interests you. Find a niche or market that you already enjoy learning about and which you are already knowledgeable about. The amount of time spent researching a certain company, trend or investment will be reduced and you might already have some information on what the market is doing without even having to dig too deeply. Being somewhat of an expert already in a certain market or at least having a working understanding of trends, predictions and worth are all skills that you already posses.
For instance, there is no sense in putting your hard earned money into collectible art if you have no passion for art. Likewise, it will be torture for you to pick stocks if you hate looking at numbers, charts, and reading news about the company that you're thinking of investing in if you have no faith in that company. While it's good to remove some of the emotion from your decisions, if you have no interest or desire to obtain knowledge about what you're putting your hard earned money into, you will likely lose interest and be off to chase after the next shiny object that promises to make you money. It is sometimes necessary to look at investing as a long term plan. Think of it like a hobby that helps you to earn money.
Next, make sure that what you're hoping to invest in actually has some value either real or perceived. Knowing the true value of things that interest you comes into play at this point. Having knowledge that the general public might now hold can help you to find things of value that are overlooked by the typical person.
Finding a painting by a famous artist or a collectible car parked outside a barn in the countryside are examples of having knowledge that most people don't have. Seeing a trend in the stock market or understanding the dynamics behind gold investing are a few other ways that having an understanding for these markets can benefit you.
Your entire goal should be to buy at the lowest price possible with the knowledge and confidence that the price or demand will increase at a future date. What separates investing from a pure hobbyist is that you view the things you buy without emotion. You might love that painting that you bought from that aspiring artist but as soon as the price for that work or art goes up, you're going to cash out. No matter how much you might believe in the company that you bought stock in, the moment you feel that their stock has peaked and it is in danger of dropping, you're going to drop it like a hot potato.
Knowing when to sell is every bit as important as knowing when to buy. Knowing when to cash out and move your dollars from an investment that has served you well into a new opportunity is the sign of a wise investor. You did good. You found a bargain and knowing when the value has peaked is also a part of the game. Long term investing is great and it is how you should look at each opportunity but when the time comes, don't allow your emotional attachment to a stock or a part of your portfolio to overcome your sense of reason. You can even set a goal beforehand and once that goal is reached you will execute the sale without emotion or doubt.
Putting your interests, likes, dislikes and temperament into your investment portfolio is a wise move. It makes the entire process easier, more fun and often highly profitable. Investing in companies, product or vehicles that you use, believe in and enjoy just makes sense. You will be more likely to keep a watchful eye on your portfolio and finding new opportunities won't be like work. It will be like fun. Also, when you're investing based upon what you like there often isn't a bad investment. That piece of art or antique car that you bought can be enjoyed both during the time that you're waiting for the opportunity to sell but also if you never sell it, you will always have that material possession to enjoy. This is called a winning investment either way.
A more simple approach and one that is more natural in both planning and execution might suit you better. By stepping too far outside of your comfort zone with an investment you waste a lot of time. When you first find out about an opportunity it is going to take time to research the market, company or type of investment. You could just jump in with both feet but often this is a foolish move and money is lost. Researching and becoming knowledgeable about a certain type of investment wastes time and often once you are comfortable with the investment, that opportunity has passed.
In order to find more success and have more fun you might want to pick investments that interests you. Find a niche or market that you already enjoy learning about and which you are already knowledgeable about. The amount of time spent researching a certain company, trend or investment will be reduced and you might already have some information on what the market is doing without even having to dig too deeply. Being somewhat of an expert already in a certain market or at least having a working understanding of trends, predictions and worth are all skills that you already posses.
For instance, there is no sense in putting your hard earned money into collectible art if you have no passion for art. Likewise, it will be torture for you to pick stocks if you hate looking at numbers, charts, and reading news about the company that you're thinking of investing in if you have no faith in that company. While it's good to remove some of the emotion from your decisions, if you have no interest or desire to obtain knowledge about what you're putting your hard earned money into, you will likely lose interest and be off to chase after the next shiny object that promises to make you money. It is sometimes necessary to look at investing as a long term plan. Think of it like a hobby that helps you to earn money.
Next, make sure that what you're hoping to invest in actually has some value either real or perceived. Knowing the true value of things that interest you comes into play at this point. Having knowledge that the general public might now hold can help you to find things of value that are overlooked by the typical person.
Finding a painting by a famous artist or a collectible car parked outside a barn in the countryside are examples of having knowledge that most people don't have. Seeing a trend in the stock market or understanding the dynamics behind gold investing are a few other ways that having an understanding for these markets can benefit you.
Your entire goal should be to buy at the lowest price possible with the knowledge and confidence that the price or demand will increase at a future date. What separates investing from a pure hobbyist is that you view the things you buy without emotion. You might love that painting that you bought from that aspiring artist but as soon as the price for that work or art goes up, you're going to cash out. No matter how much you might believe in the company that you bought stock in, the moment you feel that their stock has peaked and it is in danger of dropping, you're going to drop it like a hot potato.
Knowing when to sell is every bit as important as knowing when to buy. Knowing when to cash out and move your dollars from an investment that has served you well into a new opportunity is the sign of a wise investor. You did good. You found a bargain and knowing when the value has peaked is also a part of the game. Long term investing is great and it is how you should look at each opportunity but when the time comes, don't allow your emotional attachment to a stock or a part of your portfolio to overcome your sense of reason. You can even set a goal beforehand and once that goal is reached you will execute the sale without emotion or doubt.
Putting your interests, likes, dislikes and temperament into your investment portfolio is a wise move. It makes the entire process easier, more fun and often highly profitable. Investing in companies, product or vehicles that you use, believe in and enjoy just makes sense. You will be more likely to keep a watchful eye on your portfolio and finding new opportunities won't be like work. It will be like fun. Also, when you're investing based upon what you like there often isn't a bad investment. That piece of art or antique car that you bought can be enjoyed both during the time that you're waiting for the opportunity to sell but also if you never sell it, you will always have that material possession to enjoy. This is called a winning investment either way.
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