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11 Investing Strategies You Need to Know as Told by Financial Experts

There is a wide range of information online about investing, but how do you know what you can trust – and what will trip you up? This article has been contributed to by experts, your peers, and other financial gurus – who know what they’re talking about. When it comes to financial advice, this is a good place to start.

Investment Tips

    1. Blindly Following Investment Recommendations – Do not blindly follow the recommendations of your investment broker without doing some due diligence of your own. Ensure that the investment is registered with the SEC, and find some background information on the way that the investment has performed in the past. There have been instances of fraud – whereby the information presented by the investment broker was fabricated.
    2. Setting Up Automatic Investments – Make sure that your investments regularly have the opportunity to grow by setting up an automatic payment from your daily account to your investment account. Set up an automatic transfer to occur on payday so that you are effectively paying yourself – like any other bill. And, then watch your investments monies grow.
    3. Avoiding Stumbling Blocks – If you are a new investor, it can be easy to spend too much time thinking about a specific trade that you should have made. There will definitely be times when you hold on to a stock for a long time, or when you miss an opportunity to make a huge profit. Thinking too much about these types of events can put an enormous dent in your confidence, and distract you from making good trades in the future. It is better to learn from the experience and move on without letting it get to you emotionally.
    4. Watching Fundamentals – Adjust your margin of safety based on the reputation, profitability, and size of a particular company. While businesses like Google or Johnson & Johnson are hardy and tend to stick around, there are certain companies that may do very well for a while just before crashing. Keep this in mind when selecting stocks.
    5. Being Cautious About Higher Risk Investing – You can also test out short selling. Loaning stock shares are involved in this. The investor will borrow the shares under the agreement that they will later deliver the same amount of shares back. After this, the shares can be purchased again after the stock drops. This is definitely higher-risk investing, best left for those with a lot of investing experience.
    6. Being Smart About Dividend Stock Investing – When choosing dividend stocks as a small investor, many people fail to select wisely and properly. They position themselves in only small-cap stocks that pay a good yield. This is because they do not feel that they have enough money to purchase blue-chip stocks. However, buying three shares of a blue-chip stock at a 7.5 percent yield is better than having 100 shares of a small-cap stock for the same amount of money at a 6.5 percent yield.
    7. Working With A Professional – If you are new to investing, consider working with an investment broker. These professionals have years of experience and training that allows them to steer you and your money, in the proper direction. A good broker will help you build a solid portfolio that meets your needs, whether short-term or long-term.
    8. Holding On To Your Stocks – Consider hold your stocks for longer than a year. One approach is to sell a stock when it has dropped a certain percentage or there has been some disastrous news about the company. Another approach is to not sell when the markets have been rough for a day or even a year. Some investment advisors say that as long as your reasons for holding that stock is still good, then keep holding it. Reinvest any earnings you do not need in the next five years. Sell only if the stock goes so high that the business is just maxed out and not going to grow anymore.
    9. It’s A Stock, Not A Family Member – Never take anything personally in investing. Do not be jealous of another investor’s success. Do not let your financial advisor’s advice or criticism get to you. Do not panic when the market moves down, and don’t get overly exhilarated when it rises. Define your goals and stock pricing targets. Make any appropriate adjustments along the way. If it’s clear to you that it’s time to sell – even at a loss – do what’s best for your situation.
    10. Using A Cash Account vs. A Margin Account – A good rule of thumb for beginning traders is to utilize a cash account instead of the margin account variant. Cash accounts tend to be less risky because you could control how much of it you lose, and they are good at learning the basics related to the stock market. A margin account is a much riskier form of investing, and can quickly wipe you out if your stock goes the wrong way.
    11. Using A Roth IRA For Investing – If you plan on working past a typical retirement age of mid-sixties, consider Roth IRA investing. This investment vehicle comes with no mandatory distribution age, unlike other stock investment opportunities. This means you can sit back and watch your portfolio grow even more before you tap into it for living expenses. This can mean a longer, better retirement, or more inheritance for your descendants.

Wrapping It Up

Wading through the sea of personal investing content online can be enough to drown you. But, this article may help to be a life preserver for anyone investing for profit. The simple tips you’ve read may change your strategy going forward. I hope you found these investing tips to be useful.

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