Basic Rules for Successful Investing
Investing is a skill that can be learned as long as a person is willing to do the hard work that it entails. Most of this hard work involves gaining the necessary knowledge and experience that will allow an individual to become a successful investor.
Most importantly, one must keep learning about the nature of businesses and investments in order to keep up with the dynamic changes that continuously occur. If you are considering becoming an investor, one of the first lessons that you must learn are the basic rules that can spell the difference between a failed venture and a successful investment.
  • Divide your allocation into two parts, short term (less than three years) and long term (more than three years).
  • Allocate your funds differently for different financial goals and invest according to your targets.
  • If your goals are short-term in nature, invest in debt-related instruments and take care that you monitor your funds regularly.
  • Mid-cap and sectoral funds should not form the part of your core portfolio. Mid-cap funds could fall faster than large-cap funds.
  • Keep an eye out for lull periods in the market, and there will be opportunities. They allow you to buy into mutual funds at lower prices.
  • Don't panic during a market downturn. It is neither the end of the world, nor does it mean that what comes down will remain down.
  • Make sure your portfolio is properly diversified across different asset classes. In this way, your investments will be protected against market uncertainities.
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