Categorized | Business

Research Tips For First Time Investors

Ask any successful investor the secret to their success, and they will probably tell you it was all down to two things: a healthy dose of luck, and lots of research. There isn’t much you can do about the former, but the latter? It’s the key to all great investments. However, it isn’t easy to just become savvy investor overnight. It can take a long time to get to the point where you can reduce your risk enough to put your money down. With this in mind, we thought we would give you some tips on how to make sure your research works better for you.

Investors

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Work Out Your Risk

All investment is a risk, and there is no such thing as a sure-fire winner. Sure, you can look into stocks of successful companies like Apple, but don’t think for a second that those kinds of business are untouchable. So you have to be aware of how much you can afford to lose, rather than how much you want to spend on your investment. Always be conscious of the worse-case scenario, make sure you have the right protection in place should everything go wrong.

Work Out Your Budget

Once you know your risk, you can work out your budget. Again, never use money that you can’t afford to lose, and use a buffer to protect you from ever eating into your standard funds. Your wages don’t count as ‘spare money’, and neither do your direct savings. To get started, build an investment fund that you can use that won’t affect you on a day-to-day or month-to-month basis. Also, bear in mind that you have to allow for fees and charges. Mutual funds, brokers and other financial services all cost money. There are tax implications, too. Make sure you have budgeted for all of these costs before you invest a penny.

Get Help

Even the most successful investors the world has ever seen need help from time to time. So don’t feel embarrassed by using the research skills of an experienced investment team. For example, if you are looking at getting into the buy-to-let game, you should find a property investment firm that can help you make the most of your money. They can help you find the right property, in the right place and at the right time. It’s the same for any other investment sector – use a professional service who knows what they are doing rather than relying on your hunches.

Use Better Data

Wise investors play a long-term game, so when you are looking at data, make sure that you do the same. A sudden spike in the performance of a particular stock or bond is no indication that you are going to walk away with a healthy profit. Look into different periods to give yourself a better overall view of the big picture.

Learn About External Factors

Lots of things can see any investment tank. National bonds can be affected by natural disasters, wars, or even elections. Stocks and shares could nosedive in the event of a terrorist attack near a company headquarters, or even if a new competitor arrives on the market. Investment property is also at risk from pricks in housing bubbles – which happen more often than you might think. Never look at investment purely from a financial perspective – you should also use a global and human perspective when deciding when to opt in and when to pull your money out.

Let us know how you get on!

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