Finance

Things to do before investing

Friends, family, and readers always ask me that question. What do I need to do to start investing?
The answers to this question will be a little unparallel.

The same way stocks grows in value and pay nice dividend is the same way a business can also go bankrupt or cease paying dividends. When I mentioned to look for business with value and business that has been around for century doesn’t always guarantee that you are 100% safe from volatility. Look what happen to GE. I believe you should approach the market with caution and be vigilant. Don’t put all your eggs in one basket. In investment the terms you need to know is “diversify”.

It’s important to informed yourself, I’m not talking about the daily news. The daily news can impact things also but that should be the least thing you need to worry about because the market have a funny way of responding to daily activities. Do research about the business you want to invest in. Your hard earnings should be investing in valueable assets.

You don’t have to do it alone if you don’t want to there is a lot of Investment manager out there. Most of them have that saying “we do better when you do better”. It’s a way of telling you that they want you to make money so in return they can make their own profit. If you are not comfortable doing that you can also pick stocks base on valueable research.

One other thing to keep in mind is that the younger you are more aggressive you might be while someone that’s over 50 will want to be very conservative.

The next step is you must have the money to invest. It’s unwise to invest money that you will soon need. When the time comes the market might not be favorable to sale in your portfolio.
So make sure you have some kind of emergency fund which can cover all your bills for about 90 days. Lesson one in the Investment industry is to never ever borrow money to invest because in this game there is never guarantee. Also keep in unlike the banks the money you Invest are not FDIC insured! So words to the wise, make your investments count and invest wisely.

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