So you have passed the Invest Diva’s financial evaluation and decided to put your disposable money into good use, growing your wealth through investing. You also know the fundamental differences between trading and investing because you watched my video explaining about it.
In a nutshell, an investment focuses on a long term growth of your wealth through buying and holding while trading involves more frequent buying and selling.
There are a number of ways you can invest yourself into a long-term portfolio. I’d only encourage you to do so, however, if you know what you’re doing. Even when you’re investing using automated, passive techniques, you might find yourself lacking the investing education necessary to reach your goals. You’ve been warned.
Okay, so you still want to invest yourself. Here are 4 important things NOT to do:
1. Don’t Look At The Minor Moves: When you decide that you are going to be a long term investor and that you don’t need that chunk of money for a set period of time (3+ years) you need to also be mentally prepared for that. That means, you can’t just SAY “oh yeah, I’m in it for a long run” and then keep checking the market prices every two seconds. As I explain later, the media does a great job trying to distract investors from their long term goals. Entering a long term position is like getting hitched. You are going to have your good days and your bad days. Heck, the first 6 months of marriage is said to be the worst of it all! Yet you stick with it.
Do the same with your long term investing portfolio. Look at the big picture.
2. Don’t Start with a Huge Amount: Markets are always moving and even Warren Buffet himself can’t predict the daily moves. Whoever that tells you he/she can, is a sham.
That is why it is always good to start small and do an investing marathon. If you want to invest in a company’s stock, or in an ETF, buy a small amount of it to start and look if the prices knock it down so that you can buy more at a better price. Setting technical limit orders and planning your investing strategies when the markets are closed are some of the methods I teach at our Invest Diva investment coaching sessions.
