Investing For Normal People – 5 Golden Rules

Posted on Dec 12 2017 - 7:53am by Editorial Staff

Investing isn’t something that is just for the bears and the bulls that spend their time in the pit on the stock exchange. In fact, there has never been a better time for the average Joe like you and me to get involved in this potentially lucrative market. However, to be successful, you do need to know a little about what you are doing, something that the 5 golden rule for investing below detailed below can help you with.

Know the risks

If you think that investing in something guarantees a return on your money, you need to think again. The whole premise of investing is based on the possibility of loss as well as profit, and people make and break their fortune every day.

That means if you choose to invest your money, you need to go in with your eyes open to the potential risk you can encounter. To do this ensure that you know the risk level for the type of investment that you are making.

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Property and Bonds make a good choice for low to medium risk investment because they are usually longer-term investments. Whereas stocks are slightly riskier but do have the potential of a greater return in the medium term.

Commodities, on the other hand, are perhaps seen as one of the most risk filled investment you can make. Something that can put a lot of people off, but do remember, it can also mean that they are an area that you can make a large profit, very quickly.

Know the markets

Next, you must ensure that you know the market that you are choosing to invest in. The importance of this is that it can minimise the risks that are discussed above, making it much more likely that you will make money rather than lose it.

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Look to daily publications to stay abreast of developments in the market.

Get familiar with the state of the specific market you are considering investing by reading publications like the ones mentioned at https://www.thebalance.com/, or the ever popular https://www.ft.com/. Although do be wary of very specific advice on websites. The reasons for this are that if they know it, it’s likely that everyone will and so it won’t really put you ahead of the game. Also, there is the little comeback that you can make if the advice doesn’t pan out, meaning the value of such recommendations is, at best, questionable.

Don’t forget to also get familiar with the way that the specific market you are investing in actually works too. In particular, look at the times that the exchanges open around the world, something you can find out more about at https://www.stockmarketclock.com/ as well as minimum and maximum purchases you will be allowed to make.

Pick something you can manage online

Another rule for us normies to live by in the world of investment is to pick the areas that mean we can have full control over our portfolio. The advantage of this is that we are totally responsible for any gains and losses, and we can make a choice to learn about the markets and make informed decisions. Also, we aren’t trusting a management company to make decisions about our money for us.

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Happily, the word of investing is opening up and becoming much more accessible to private investors online. Especially in the fields of property, stocks, and commodities. Visit https://commodity.com/ for more information on the latter. Something you will need to see whether it will fit your investment preferences and style.

Start as early as you can

Another golden rule that is vital to not overlook is to start your investments as early as you can. Why? Well, the reason for this is that despite some lucky folks making a lot of money instantly with investments, most gains are a lot more reasonable.

That means if you are investing for financial security in the future you need to leave as much time as possible to accrue and grow the profits that you are making.

That is why it is important to save and invest during your early twenties if possible because then you stand a much better chance of achieving your financial goal by the time you retire. All without having to make more risky investments to ensure you meet your target amount.

Diversify

Last, of all, us normies may consider having investment all over the place too confusing to deal with. However, there is definitely some sense in not putting all our financial eggs in one basket.

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This is because that if one market fails horribly, your entire investment isn’t lost. That means it wise to consider a combination of stocks, bonds, properties, and commodities, as then you have a balance of risk and potential, see more on this topic at http://www.dummies.com/. The value of this being that can lead to the best return on your money when playing the long game.

About the Author
Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.