During the bad economy,for all investors we need to pick up some basic investment principles back.Here is what we should avoid and what we should follow for every investment.
Every time when you decide to do some investment,we should adopt the follow advices:
No.1,Be a disciplined person.Before an investment,you need to set some invest rules,I would suggest to write down what you will do and let the public know all about it.You can start a blog,just like me and then tell the world your intention.Something like how much you would like to invest in a property and stock market.After how much profit or loss,you should sale your stocks or property,the big advantage is that you have a roadmap to follow when you do some investment.
No.2,Invest for capital growth and income.It is understood that people do investment for the growth of their capital.However,it would even better if the investment can bring some income.For example,you can invest in some properties,its value may grow when it is in a Bull market.You invest a house,in another word,you have the rights to use it,you can rent,then you can get some rent.The whole thing is quite simple,do your invest for capital growth and income.
No.3,Do diversified investments.One of the best way to avoid financial disaster is following diversified investments.You can invest in several project,stocks,property,bond and gold etc,besides if you have decide to enter the market,it is also high recommend to invest in instalments.The best part is that diversified investments can greatly reduce risks for you.
No.4,Be cautions.Once you find over 5 percent to 10 percent lose of your capital,you need to quit before any larger loss.
Rules you should not do:
No.1,Be aware of inflation.Inflation can be the No 1 danger for investors.Once the inflation goes up,currency will follow the downside.For investors,the best countermeasures are investing real estates,such as the shares and property,these countermeasures have been proved as the best way to against inflation.
No.2,Never rely on market forecasts.It has been known that Humans are unable to precisely predict the markets.Do not trust the forecasts that much.Investors should focus on their portfolios and ensure that they are well diversified.
No.3,Don’t hold before market falls.The market is not going to grow everyday.And it will fall once it reaches the point.For those of you who like long term investment for years.Keep reviewing your portfolio and quit before any market changes.
No.4,Don’t believe those appear to good to be true.Never believe too good things.As a matter of fact,when someone recommend you a very high profit investment,you should ask,why people show they gold goose if it is that profit.And most of those recommendations come forth to be traps.Why not try the New Zealand government bond,one of the most safest investment in our world,the profit is about 5%.If you want to do some save investment,5% growth of capital is what you should expect.Any return more then 5% is dangerous, the higher return level you want,the more risk you need to face.No exceptions.
No.5,no familiarity no investment.If you find that you can not figure out something,then it is high recommend to avoid investing it.Just image,if you can not understand a business,how can god let you become rich from it?The world is quite fair,only 10% people can make money from a business while the rest just loss money in their deals.And those 10% people are called experts.
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Nice post & nice blog. I love both.