One of the things that many people assume is that they need to be some sort of “expert” in order to make money as an investor. This market has also scared off a number of would-be investors. However, in order to be a successful investor, there is no need to pick the “right” stocks or follow some convoluted strategy. Rather, it is possible to earn money over the long term with a simple investing strategy. Financial Highway offers these 10 tips for successful investing:
- Have an investment policy statement.
- Employ proper asset allocation.
- Buy low cost funds (index or ETFs).
- Ignore the noise.
- Know what you are investing in.
- Contribute regularly.
- Review regularly.
- Make needed changes.
- Avoid exotic “investment opportunities”.
- Ignore the ups and downs of the market.
To me, this essentially boils down to understanding how the stock market and investments work. And then choosing investments that are likely to win out over time, sticking with a plan you have developed. I like the idea of low-cost index funds because they track the performance of a specific stock index, meaning that you do not have to rely on stock picking ability in order to see solid gains.
You should realize, though, that you are unlikely to reap immediate and huge rewards from this. For most people, though, this investment strategy allows you the chance to see good returns over time. Success means reaching your financial goals. A long-term strategy is more likely to see you that than a short-term attempt to “make it big” all at once.