The Greenhorn Guide To Investing

Confusion sets in quick when you're starring at mountains of information on investing. Countless articles and books have been written along with systems of investing. It seems everyone has a system out there that claims to be unique. Here's the cold hard truth and a step-by-step common sense guide to help your investment endeavors.

1. The first place to propel you into the crazy world of investing is learning. I'm all for affordable resources like the rarely visited and forgotten public library or a good internet website. Learn all you can by reading books, listening to audios on the subject, hanging around those winners that have already done what you want to accomplish, and anything else that provides the knowledge you need to know before the actual monetary investment is made. You'll never stop learning new techniques. There's a point to actually do the work and invest real money, but first, follow step 2.

2. Once you've acquired the basics, put it to the test by using a simulation to make sure you truly know how to invest, not just the theory. You'll save a fortune if you do this exercise a few times before spending your hard earned dollars. Investing is about growing capital, not gambling. The person that knows the least gambles the most. Simulation is a game and it can be a fun learning experience. Contests are a fun and easy way to learn and many contests have real money to the winners, and a large percent of those contests are free to enter. Get involved in one or more of them and you'll learn to earn with an opportunity to win cash. Don't feel discouraged if you lose a contest. It's a learning tool and if you made money at all on paper, it's time to start actually investing for real.

3. Research is vital and one hundred percent necessary. Without it, you might as well throw darts at a board that has ticker symbols tacked to it or forex markets. Gee! Should I buy that stock or this currency? Hmmm! Virtually all the trading websites have tools to minimize the risk. Stop losses can help dampen any losses, and other tools can help gain profits. Dollar Cost Averaging can be a friend to the investor with the idea that automatic investing is ok. A thoroughly researched company or mutual fund can reap huge rewards over time with this technique. Be careful to watch and not forget about the investment. If a stock gets too ridiculously low, there's trouble. The poor investors of Enron learned that the hard way.

4. Putting your eggs in one basket is never a good idea. Again, look at the folks who blew their nest egg on company's like Enron. And the stock didn't go to zero overnight. It was gradual. If you told me you invested $100,000.00, and lost $50,000, I'd say, "Good Job. You still have $50,000 left to do something with. You pulled out before you lost it all." You now have to be extra careful and protect your investment and spread it around. Diversify is one of the best investment terms ever made. It can protect you.

5. You only have to be right 51 percent of the time. Don't sweat. Some of the most famous and influential men in history died broke, yet they taught others and left a legacy. Money is not everything, but it has the ability to make life easier if we just remember that it's just a tool to help and nothing more.

6. The best investment is in your self and your own business, and not someone else's. More people become wealthy as business owners than investors. It's possible to be a great success as an investor, but the mega rich are business owners and investors. This goes back to the principle of diversification. If you're a business owner only, park some of your profits in stock, bonds, mutual funds, real estate, etc. If your business goes under, you can have the capital to start another. Most wealthy individuals have built and lost their fortune a number of times before learning the value of diversification. Even if you own the company, circumstances beyond your control can change things for the worse. Perhaps a new major highway is rerouted past your place of business and directing traffic elsewhere. You never know what will happen, so prepare yourself.

7. The answer to the question is the plan. Proper planning produces proper results. Without you having a plan of action for your life, someone else will have one for you. An employer is not necessarily a bad person, but he has his own plan for your life. Are you going to let him write your story or are you going to write your own?



About the author:
AJ Dowell focuses on helping folks become independently wealthy with the help of his mentors and website http://dowellandassociates.com AJ offers a free newsletter at http://linksforwriters.com with fresh articles and writer resources. Let AJ help you save time with http://adowell1.ordermygift.com and allow more time for important things that matter.Never confuse motion with action- Ernest Hemingway.

related articles:

click  here  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15   back