Steps to Become a Smart Investor
Feb 06, 2023
The need to invest your money wisely is greater than ever, and this often requires looking beyond the obvious as you must remain vigilant to protect your money. Here are some recommendations that can help you to become a smarter investor by learning to take action to protect and grow your investments.
Track your investments
My first recommendation would be to keep an active track of your investment. You should also regularly review your receipts and statements to ensure all your money is accounted for. Investing involves a lot of nurturing, which is why it is crucial to keep track of your money. You can also create spreadsheets that have all your investments listed to track and analyze performance.
Do your research
Conduct your own research instead of just listening or following blindly. Always actively enhance your financial knowledge, which will allow you to make better investment decisions. This reminds me of the words of Robert T. Kiyosaki, the well-known author of the personal finance book Rich Dad Poor Dad, “Before you invest in something, take the time to understand it.” This is pretty good advice, considering that one of the most common mistakes that beginner investors can make is getting involved in investments that they don’t know enough about. Studying potential assets you are planning to invest in will help you to get an idea of what you are jumping into without actually committing to it.
Understand the fees
Understanding the fees associated with each asset is critical since it reduces your returns. You should also be aware of the impact of tax on your investments. When comparing returns between various investment options, it is better to include the fees and taxes, as well as, accounting for inflation. This will make it easier for you to assess the actual returns among the various investment options.
Seek professional advice
Lastly, seek advice from a financial expert or investment professional who can help you make informed investment decisions. A licensed financial advisor will be more knowledgeable about the various investment alternatives. They can provide you with valuable insight and guidance to help you achieve your financial goals, as the fundamentals of investment planning require defining your investment objectives, risk tolerance level and investment horizon. Review your, portfolio quarterly or semi-annually to ensure you are achieving the goals and objectives you had originally set.
The process of smart investing demands keen eyes and a patient mind. Investing smartly can help you grow your wealth and improve your financial stability.
Anna-Joy Tibby is the Assistant Vice-President, Personal Financial Planning at Sterling Asset Management. Sterling provides financial advice and instruments in U.S. dollars and other hard currencies to the corporate, individual and institutional investor. Visit our website at www.sterling.com.jm
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