4 Golden Rules in Investing You Should Know About
Investing does not have to be complicated. The rule of thumb is to have discipline and the right methodology in order to be successful in stock investment program. Understand and adopt these four essential guides to guide you along the way.
- Invest EARLY
The game plan in investing is to invest early. Why? Your greatest ally in investing is not just the amount of money you have invested, but the time itself. The power of compound interest is the reason why you should invest early. Prior to investing, I’ve learned that my mentor had opened a stock market account for his baby who is just a few months old. He explained to me the value of investing early and making a wise financial decision. Consequently, I also opened an account for our 8-year old son Justin. So, start investing while you’re still young.
- Invest REGULARLY
Buy stock regularly in great companies. I put at least 5,000-10,000 pesos to our 2 accounts every month in a stock market. The “principle of pay yourself” is the key to consistency. After setting aside your tithes and offerings for God, put at least 20 percent of your income to your investment regularly. Even if it as a small amount, your portfolio will grow over time when you invest regularly.
- Invest LONG TERM
Financial goals can be classified into three: short, medium, and long-term goals. Retirement, college education fund, and building a house are some examples of long-term goals. The advantage of investing long-term is that you will minimize the risks. For giant companies, your game plan is to buy and hold stocks for a long period of time to maximize the return.
- Invest using DIVERSIFICATION
Diversification simply means do not put your eggs in one basket. Make sure that your portfolio is diversified. You can put some money in food industry, mining corporation, telecommunication and banking industries, and real estate companies. Invest in various giant companies that you think still be there in 10-20 years. Another way to diversify your investment portfolio is to invest in mutual fund companies.
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