More and more people choose to invest their money. Yet not everyone is equally successful. Would you like to join the group that is successful? Then get to work with these five golden tips.
Practice, practice and practice again
You are not a successful investor overnight. Even if you read up well in advance and know exactly what is expected of you, it is difficult to actually make money from those first investments. After all, practice is not the same as understanding the theory. Do you have serious plans with your online investments? In that case it would be a good idea to start with a demo account so that you can practice in peace and quiet.
With almost every online broker you can choose between a real trading account and a demo account. The latter is meant to get a good grip on investing before you start trading money. The online broker makes a fictitious amount available, and with that amount you can make numerous investments. You will follow the real-time prices, have the opportunity to try out various investment strategies and you will learn better and better how the (economic) news influences the different stock market prices. Above all, go and practise, practise and practise even more! You will gain the necessary experience before you switch to a trading account and start using your own money.
Create as diverse a portfolio as possible
Apple shares, Shell shares, crypto coins and commodities such as gold and oil: these are all investment products that have proven in the past that they can be highly profitable. Yet you should never invest your money in just one product. The chance that something goes wrong is simply too great. Just look at the bitcoins. A few years ago, the price of this crypto coin suddenly rose to great heights. Everyone wanted to get in, but not everyone turned out to be equally successful. Because where a price can rise significantly, it can also collapse sharply from one moment to the next. Gone is the money you had so carefully saved for your investments.
- If you are going to invest, you should always spread the risk. You do this by creating a portfolio that is as diverse as possible. Spread over various categories or sectors. So it is not wise to put all your money into the automotive sector, even if you buy shares of several companies.
- If the car industry is in a bad way, it will affect all the companies that are active in this sector. With a portfolio that is as diverse as possible, you can spread the risk and better absorb possible losses. And yes, this also applies to investors who only have their positions open for a few minutes.
Stay up to date with everything that’s going on
Stock market prices depend on the current situation in the world. So if you want to be successful with your investments, you need to be well informed about everything that is going on. The economic and financial news will hold no secrets for you, and the world news will follow you closely as well. This is the only way to estimate what will happen with the prices. But a good investor does not only focus on the news. It is at least as important that you know the products in which you invest.
A fundamental or technical analysis can help you make good decisions. In a fundamental analysis, you look into the annual and quarterly figures of a company. In a technical analysis you look at the prices from the past and try to translate these into the situation of the present. The more often you do this, the better you become at it. In the end, you can better assess what will happen in the (near) future. This gives you the chance to draw your own plan without blindly following the masses.