Seven Tips for Successful Investors
Here are some common sense tips that will improve your investment success, no matter what your level of financial sophistication.
1. Come early to the party and stay late! Begin investing as soon as you can, be patient, and let time multiply your investment performance with compound growth.
2. Spread your investments around. Diversify!
3. Cut the IRS off at the pass. Invest as much as you can in tax-deferred plans, such as IRA’s, 401(k)s, profit sharing plans and annuities. Your money will grow faster and you can afford to invest more now because you won’t have to pay taxes on the money until you retire (possibly in a lower tax bracket).
4. Don’t let the bears get you down. Don’t panic and sell low. Let the bear market run its course, which history tells us is likely to be short.
5. Don’t expect miracles. Your investment decisions won’t be right all the time, and some of your funds will underperform your expectations. But as you rebalance and weed out consistent underperformers over the years, you will generally achieve a reasonable overall investment return.
6. Buy-and-hold, don’t cut-and-run. Don’t change mutual funds every year to acquire last year’s hot performer. It may be a flash in the pan, and to buy it you may be dumping a good long-term investment, tossing it from the frying pan into the fire and missing the sizzle altogether.
7. Don’t be afraid or intimidated to seek help from a financial professional.