Greetings! What advice would I give for those, who starts their journey in investment? Today's article is the top of 7 the most important, in my opinion, rules for beginners.
Investments for beginnersInvestments for beginners
I am often asked, what would I advise for beginners, to avoid mistakes and get used to investments. After all, the most difficult thing in any business – start and don't throw, disappointed in the results.
so, today I will cite 7 advice, which I would give myself 3 years ago, when I was just starting to get acquainted with the world of investment. I hope, that they will help not only beginners, but also, who is already investing in terms of rethinking some approaches to investing.
1. Do not panic when assets fall.
That was my first lesson in investing., when I started in October 2018 of the year, and by the end of December, markets were falling on 20%. It would seem that, only 20%. Now I wouldn't even call it a correction., but then without experience I became uncomfortable, I spanished and sold my entire portfolio at a loss. Literally the next day, the markets went up..
But I had no thoughts of despairing and ending there.. I had a clear idea., that I will connect my life with investments. Now I, vice versa, I am waiting for such corrections and even collapses, to buy assets at a cheap price. So don't panic or worry., if the market falls, this is the norm for any market.
2. Have your own investment system.
To avoid panic when the market falls or excessive joy when it grows, you need to write for yourself the rules of investment and clearly follow them. When I started, I didn't have any system. I just bought shares of different sectors, before that, analyzing them. The result is written in 1 Paragraph.
After the failure, I have built an investment strategy for myself, who answers questions: What criteria do I buy shares by?? How often? For what amount? What I will do, if the market falls? For how long I invest? Etc. Knowing in advance the answers to these questions, you can protect yourself from stupid actions and incomprehensible situations in the market.
3. Start with the wrong amount, which they are ready to lose, a little more.
Many financial advisors advise you to start with a comfortable amount., which is not a pity to lose. I believe, that it's a bit wrong in that sense., that a comfortable amount will not give you real psychological pressure, which will be with large amounts.
If you plan to just play on the stock exchange with a trifle, then please. But if you have plans to save money, increase capital or receive passive income, then you need to be prepared for serious drawdowns. Therefore, it is better to start with the amount, which slightly exceeds the amount, which you are ready to lose.
For example, you are ready to lose 5 thousand rubles, but 10 thousands for you is already a more serious amount. Start with 10 thousand, to immediately start training your psychology, be prepared for drawdowns and not pay attention to market falls. After all, with the growth of capital, psychological pressure can increase..
4. Do not speculate.
It wasn't a revelation to me., that speculation and active trading in the market lead to loss of capital in most cases. That's why, when I started, I immediately focused on long-term investments, knowing, that speculation – it's a casino. Maybe the first experience of playing on the stock exchange helped, when I was 15 years.
Therefore, if you have a serious approach to investment, don't do nonsense. If you really want to play on the stock exchange, then allocate for this maximum 10% Capital. I have about as much allocated to the speculative portfolio, although there I do the maximum 5 transactions per year.
5. Think Big.
In investments, it is important to look at the market more broadly and operate at large intervals of time.. I wrote about this in more detail in the previous post "The Secret of Investments". In short., then do not pay attention to the fluctuations of stocks for a day or a week. More important are long-term changes in the company's capitalization, implementation of its investment projects, growth of shareholder value and financial indicators.
For example, in the comments recently wrote, that Novatek is falling, what to do. Yes, maybe in the last days or weeks it has sagged a little, but in recent years, the stock has risen in 2 Times. And if you look at historical data., then this is the best growth story in Russia. All Why? Because a great investment program, which is supposed to open, develop and implement new investment projects. The company fulfills and even exceeds its development plan. So before looking schedule shares per day or several days, better analyze the company as a whole.
6. Constantly learning.
"I'll read a couple of articles and books about investments and start earning money." – No, this is not true. In any activity, you need to constantly learn and gain experience, to grow. You need to keep an eye on that., what happens to your investments. To know, where the business of companies is moving, shares of which you own. What is the key rate?, if you have bonds. And in general, to be aware of news in important sectors of the economy for you.
It is necessary to improve the investment strategy, described in 2 Paragraph, to learn from their mistakes, learn something new from the broker, from the Internet, books and courses. In investments, as in training, you need to constantly swing, to be in good shape.
7. Invest regularly.
You can't just take it., invest all the money and wait for the result. Investments – this is not a deposit in the bank. It's a viable and volatile market., which you need to monitor and invest regularly. Buying assets regularly, you do it at an average price – reduces the risk of one-time investments at an inflated cost, because. you can never say, where the market will go next: up, way down, sideways or in circles
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