If we were to wind back the clock a few years, investing was something that the Average Joe would never have dabbled in. After all, this was left to the pros.
Well, times have changed. Technology has in-part helped with this, and one only has to cast their eye over software that helps with trading CFDs to see this in its full glory. Again, this was something that most “normal” people would have never encroached.
Now, it’s completely normal. In fact, a lot of investors do this “on the side”. In other words, they also have a full-time job.
Whether you fall into said category, or you have taken the plunge to do this on a permanent basis, today’s article should help you regardless. We will now look at some habits that you must tap into on a regular basis if you are to become a successful, serial investor.
The art of diversification
Sure, become a master at one form of investing, but don’t become a one-trick pony. The term “not putting your eggs in one basket” couldn’t be truer in this case – even though it can be a very difficult habit to follow.
Even if one particular area seems to hold a lot of value at the moment, always be on the lookout for other sectors. This will give you some leeway if things do go pear-shaped and your strategy of choice starts to fail.
Never trust your instincts
In a lot of walks of life, it is your instincts which get you through scenarios. When it comes to investing, this should never happen.
As unnatural as it might seem, don’t rely on gut feelings in this game. If you do this, your emotions will start to make decisions, and this is where mistakes creep in.
Whether you are investing in the stock market or real estate, make sure that every decision is based on cold, hard facts.
Balance your cash
First and foremost, you always need savings. These cash reserves are going to be a fallback in life; whether it’s for an emergency or even to fund your retirement.
At the same time, make sure these cash reserves don’t get too big. When stuck in a savings account, cash becomes quite inefficient. It falls to the power of inflation, and you’ll lose out.
As such, make sure that you hold enough cash reserves to be comfortable, but don’t let them grow too big that you are effectively losing money.
Make longer-term your main focus
Sure, there might be the odd short-term investment that is simply too good to turn down.In the main, you need to be setting your sites longer term though. This means that you shouldn’t jump on a daily fluctuation in the stock market, but you should be looking to hold tight and profit more from your investment. Let’s not forget that when it comes to the stock market, history suggests that the average annual return should be 10%. Of course, this doesn’t mean to say that everyone is going to cash out and be a winner, but in terms of a general overview of the S&P it should give a good overview of what the long-term returns are.
