/Kysha Wheeler/ -- Investing your hard-earned money is risky business. You can lose it all in just a matter of seconds if you are not careful. Many often wonder why stocks are still viewed as such a lucrative investment option if you stand to lose so much. But these individuals are ignoring the fact that the possibility also exists that they could earn far more than they have invested as well. While it impossible for me to guarantee you returns on any stock, there are a number of best practice guidelines that could help you invest wisely and make a profit. Consider these 5 simple steps to investing wisely:
1. Do not be pressured to follow the crowd
Warren Buffet once said, “Be fearful when others are greedy, and be greedy when others are fearful!” These simple words serve to teach us an extremely valuable lesson. Investing in a stock simply because your neighbour or co-worker has already done so would be foolish. It is also just as foolish to avoid a stock simply because your friends think it is a bad idea. Since you stand to lose or gain so much, the decision should be based on careful research and not the pressure to conform to your peers.
2. Keep your emotions in check
Business is business. The stock market is no place to invest your emotions. This is not the time to become greedy or overly fearful. While it is never a good idea to throw caution to the wind, most huge payouts often come with some amount of risk. It is also unwise to become too greedy when looking for new investments. Crafty Financial Advisors often form ponzi and other dangerous schemes to capitalize on our greed and build their own fortunate. Don’t become their next victim. Aiming for modest returns is both safe and practical.
3. Invest from your excess
Investments do not guarantee an income right away. Even if you are promised a 400% return on your investment, it would be unwise to invest money that your family depend on for sustenance. Don’t be afraid to start small. An investment does not have to be an extravagant some. Most millionaires will readily tell you that they invested in instalments and it paid off big.
4. Check the cost
Many have watched their profits dwindle down to nothing because they did not take the time to consider how much it would cost to buy and sell stocks. Stocks are big business not only for the investors, but also the brokers and investment houses. Shop around and find the best rate. If you are new to investing on the stack market, seek the help of a trust Financial Adviser. They may charge you for their services but they can help steer you in the right direction.
5. Become financially savvy
Do not leave your Financial Adviser/Broker to do all the work. You need to become abreast with what is going on with your money. Learn to understand financial statements so that you can make a well-informed decision.