The Internet is filled with investment advices and tips for new investors, we have a few of them too. But today we share some valuable investing lessons to remember for experienced investors.
Investing is for the long haul and anything that is for the long haul has some learning curves and moments where you start doubting your decisions.
Here are few investment advices compiled from expert investors to help you in your journey and make you feel a little less alone.
First things first,
1. Mistakes Happen
Investing isn’t perfect, and everyone makes mistakes, even the great Warren Buffett. In fact, it is impossible to invest for a long duration with zero error. It’s okay to make mistakes as long as you learn from them and try to rectify them.
2. Buying Isn’t Everything
Buying stocks is just the beginning. You need to pay attention to what happens after you buy because the market can change rapidly. And once you start loosing money, you start to panic and this panic causes you to make more mistake. Always remember, buying is just the beginning.
3. Balancing Your Investments
Deciding where to put your money is important. Adjust your investments based on what’s happening in the market. Asset allocation is very important and should change in regular interval as per requirement. This change should be very careful.
4. Understanding Market Ups and Downs
Market cycles are like a swing—sometimes they’re up, and sometimes they’re down. You need to understand when to be cautious and when to take risks. This will take time to understand if you are a beginner but with time these market cycles will get easier to understand.
5. Seizing Opportunities
When the market goes to extremes, it’s a chance to make good decisions and potentially earn more money. But this approach is again is for experienced investors and should be approached with caution. A good understanding of the market and economy is a must for this.
6. Investing for the Long Term
Investing in things that will be important for a long time can pay off. It’s like planting a seed and waiting for the tree to grow. Investing is easy if you don’t expect the results to be quick. Do not try to invest for a short term and expect a long term result.
Even master investors such as Munger and Buffett run massive businesses as their main job and investing as a part time occupation. This helps them keep focus and earn money through their main job and maintain this wealth and multiply it through investing.
7. Understand What You’re Buying
You need to know what you’re investing in and make sure it’s a good deal. Don’t just buy something because it’s cheap or is trending. A lot of people invest in overhyped companies and IPOs only to regret later.
8. Measuring Performance the Right Way
It’s important to measure how well you’re doing, but don’t do it when the market is acting strangely. Wait for things to calm down. And measure performance over a long time and don’t do it frequently over short periods of time.
9. Staying Patient in Crazy Markets
Use common sense and stay calm, even when the market is acting crazy. Markets are not in your control but how you react to it will decide your financial well being. Don’t give in to panic and frenzy.
10. Making Smart Moves with Your Money
Look at the big picture and think about what’s a good deal. Keep learning and keep evolving your investment journey.
Conclusion
Investing isn’t just about numbers; it’s about making smart choices and staying patient. These 10 lessons can help you on your journey to financial success.
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
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