I found this guidelines which I hope you will find useful in your own investing decisions. (Source: Ready To Be Rich site)
1. Have an investment objective
Investing because you want to be rich is actually a lame reason, sorry. Before you invest, you should have a specific objective in mind first.
For starters, ask yourself where do you want to spend the money in the future? Is it to buy a car? For your child’s college tuition? For travelling around the world when you retire?
Having realistically optimistic goals will help you immensely in choosing where you should invest.
2. Don’t time the market
Many people ask when is it a good time to invest, my answer is always NOW.
If you have the money, then there’s no reason for you to delay, just do it and don’t wait until the market becomes “favorable” – because no matter how the economy is, there is always an instrument out there that’s good to invest in. Trust me on this.
3. Make a workable regular investment plan
Aside from investing early, you should also invest regularly. This is really important specially if you don’t want to time the market.
Investing exact small amounts, in frequent intervals, on one instrument, allows you to “cost average” – this investing strategy really helps lessen your risk against market movements.
4. Diversify your investments
While your investment decisions highly depend on your investment objectives, it’s important to keep in mind that you must also have a balanced portfolio.
This means you should not bear too much risk, nor have too little. You can’t put everything on the stock market, the same way you cannot just invest in time deposits. Diversify!
5. Shop around
I don’t literally mean that you should go to the mall and shop. What this means is that you should take time to go around, see, ask and learn about all the investment options that’s available and compatible to you.
Aside from the rates of return and potential earnings, be sure to know the investment costs and fees. You must also know their terms such as holding periods, rules for redemption and others.
This could take some time – and that’s okay. In the meantime, while you’re still “shopping”, you can let your money earn a few bucks inside a short-term zero-risk time deposit.
6. Monitor your investments
Regularly monitor how your investments are doing, at least do it once every quarter. Personally, I do mine once a month. It’s up to you, just don’t do too often like everyday because that will be counterproductive already.
The reason why you need to know how your investments are performing is because you want to make sure that you’re still on course to achieving your objectives.
When you see that an investment is not earning as expected, then put a “flag” on it and see if it would be good to wait it out for awhile, or if it’s better to move your money to another investment.
There are no strict rules here actually. I suggest that you just do whatever feels objectively right. Do the computations and adjust your portfolio accordingly.
Once you get yourself started in investing, you’ll see that your financial knowledge will dramatically increase. Soon, you’ll be more savvy in your investment decisions and see better opportunities for your money.
The secret is again, to start investing now.
1. Have an investment objective
Investing because you want to be rich is actually a lame reason, sorry. Before you invest, you should have a specific objective in mind first.
For starters, ask yourself where do you want to spend the money in the future? Is it to buy a car? For your child’s college tuition? For travelling around the world when you retire?
Having realistically optimistic goals will help you immensely in choosing where you should invest.
2. Don’t time the market
Many people ask when is it a good time to invest, my answer is always NOW.
If you have the money, then there’s no reason for you to delay, just do it and don’t wait until the market becomes “favorable” – because no matter how the economy is, there is always an instrument out there that’s good to invest in. Trust me on this.
3. Make a workable regular investment plan
Aside from investing early, you should also invest regularly. This is really important specially if you don’t want to time the market.
Investing exact small amounts, in frequent intervals, on one instrument, allows you to “cost average” – this investing strategy really helps lessen your risk against market movements.
4. Diversify your investments
While your investment decisions highly depend on your investment objectives, it’s important to keep in mind that you must also have a balanced portfolio.
This means you should not bear too much risk, nor have too little. You can’t put everything on the stock market, the same way you cannot just invest in time deposits. Diversify!
5. Shop around
I don’t literally mean that you should go to the mall and shop. What this means is that you should take time to go around, see, ask and learn about all the investment options that’s available and compatible to you.
Aside from the rates of return and potential earnings, be sure to know the investment costs and fees. You must also know their terms such as holding periods, rules for redemption and others.
This could take some time – and that’s okay. In the meantime, while you’re still “shopping”, you can let your money earn a few bucks inside a short-term zero-risk time deposit.
6. Monitor your investments
Regularly monitor how your investments are doing, at least do it once every quarter. Personally, I do mine once a month. It’s up to you, just don’t do too often like everyday because that will be counterproductive already.
The reason why you need to know how your investments are performing is because you want to make sure that you’re still on course to achieving your objectives.
When you see that an investment is not earning as expected, then put a “flag” on it and see if it would be good to wait it out for awhile, or if it’s better to move your money to another investment.
There are no strict rules here actually. I suggest that you just do whatever feels objectively right. Do the computations and adjust your portfolio accordingly.
Once you get yourself started in investing, you’ll see that your financial knowledge will dramatically increase. Soon, you’ll be more savvy in your investment decisions and see better opportunities for your money.
The secret is again, to start investing now.
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