Do you want to learn how to be a smart investor?
These evergreen tips will help you make the most out of your investments regardless of the markets you're in. Be it cryptocurrency or stocks or foreign exchange markets.
It's never a good idea to blindly invest your money on assets without having a clear understanding of what you're doing. For the same reason, it pays to do some homework before you begin.
These will make all the difference in the end and max out your profitability chances.
How to Invest Wisely
These tips should stand the test of time like they have for over a century.
With that said, let's throw some light on them:
1. Play With Disposable Cash
Unless you know what you're doing, it's a good idea to only invest what you can afford to lose.
If you're over-investing or even borrowing money to invest in a market, it may not go your way, and ultimately result in losses. Prices always fluctuate and if you expect price pumps, you should be more than willing to accept dips too.
Save a portion of what you make and invest it to grow your assets column.
2. DYOR - Do Your Own Research
Never make an investment because of a gut feeling or because someone you know is about to drop some cash on an asset.
Always do your own research on a project, and if their goals align well with yours, it should make for a decent investment. Don't be the one who makes a purchase because a dozen other people are doing the same.
Unless you know you're doing, investing anywhere is as good as gambling.
3. How To Be a Smart Investor - Never FOMO Buy or Sell
It's a natural human tendency to think an asset will only continue to grow if it has seen a rapid growth in the past week or so.
On the flipside of the coin, just because an asset has tanked doesn't mean it will fade to oblivion.
Fear of missing out or FOMO as it's called in investing terms is one of the main reasons why the rich get richer and the poor get poorer. If you think with emotions, you're in for a rough ride.
Investing isn't for the weak. Markets will have ups and downs, that's why they are called markets.
4. Spread the Risk
Be aware of the fact that you're never married to an asset or two at any time.
Spread the risk by diversifying your portfolio as much as possible. Bull markets (uptrends) and bear markets (downtrends) don't last forever but the strong hands do (think with head).
The fact that there are price swings is a strong testimony of the fact. Also consider no two assets will pump or dump at the same time and that makes profit taking way easier if you're diversified.
5. Protect Your Assets
This is of utmost importance if you're involved in digital assets. Make sure to have a strong password if you're dealing on third-party marketplaces.
With cryptocurrencies, you can invest or day trade on exchanges. Make sure to have a multi-level security in place like an authentication app to make sure no one else can log in but you.
The last thing you would want is to lose your assets because of clumsiness.
6. Browse in a Safe Environment
This isn't to say you shouldn't be browsing in less secure websites, but if you're doing transactions, make sure the website is legitimate.
There are online scams and they often impersonate real websites because people trust them.
Make sure to not fall for one of these since these are known for identity and credit card thefts. Some may even sell your breached data to other scammers who operate the same way.
Some of these leave obvious patterns. If something sounds too good to be true, it is!
That brings us to the conclusion of this brief guide on how to be a smart investor.
Out of these, what tip is among your favorites? Are you an investor in any of the financial markets? Or did we miss anything?
Either way, let us know by leaving a quick comment down below.
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