If you are looking to start investing, or if you are already an investor but are looking for ways to do it more effectively, there are specific measures that you can take to step up your game. For one thing, you should learn some of the primary methods that are used by successful investors. Understanding the basic principles of investing wisely will take you a long way.
Another essential step to take in ramping up your investment skills is to test your IQ with CerebrumIQ. Gaining a better understanding of your cognitive abilities will give you a much better sense of how you go about navigating the investment world. It will also help you understand what you need to do differently to improve upon the techniques you currently use.
Image by Alexsander-777 from Pixabay
Tips for investing wisely
Let’s start with some tips for investing wisely. If you make a habit of following these tips on a regular basis, you will be well on your way to building a profitable long-term investment portfolio.
Start investing early
If you wait until you are 65 to start investing, you will likely have a hard time building your wealth. Making a substantial amount of money takes time, patience, and consistent effort. Even if you are just starting out in your career, you can get in the habit of making small investments that you can later build upon as you grow your wealth.
Your strategy should involve several factors:
1. Your age. If you are at the beginning of your career and don’t yet have a lot of money, you won’t be able to invest as much. You can always start small and invest more later.
2. Your financial goals. It is a good idea to figure out how much money you want to have by the time you retire and create distinct financial goals that you can then target your investments towards. Financial experts recommend not relying on Social Security alone as it is generally considered insufficient for most people’s needs.
3. Your risk tolerance. Some people are willing to take big risks with regard to their investments. Certain stocks, for example, have a big potential for growth but also carry a lot of risk as they could crash and make investors lose a lot. Other people choose to invest in more stable assets, and still others create balanced portfolios. We will discuss this further below.
Be consistent
Investing isn’t a one-time activity that you simply get done and forget about. If you want to be a successful investor, you need to make it part of your lifestyle. Make a point of checking your investments on a monthly or quarterly basis.
As you do this, think about any adjustments that you might need to make based upon changing asset values. And also consider changes in your overall financial situation and whether you are in a position to invest more than you have in the past. The more carefully you go about this process, the more successful you will be.
Build a diverse portfolio
We mentioned the principle of diversified investing above. This is an essential part of becoming a successful investor. Building a diversified portfolio involves individual considerations, and each investor needs to consider his or own personal circumstances. Points to keep in mind include:
• You should include a balance of different types of assets. Stocks tend to be riskier, while bonds, precious metals, and certain other assets are more stable. The most profitable route for many people in the long-term is to invest in mutual funds or ETFs, which include a mix of asset types in them.
• Some stocks are riskier than others. Certain stocks hold a high potential for growth, but can also crash dramatically. Look at the history of your potential stock investments before you buy.
• More and more people are investing in “alternative investments.” This includes things like real estate, collectibles, and cryptocurrency. If you have a particular interest that could be profitable, this could be a good way to invest.
Take an IQ test
You should also take the time to assess your IQ and what your various cognitive strengths are. There is a groundbreaking new online test called Cerebrum IQ, and it not only tests your overall IQ level, but breaks down your cognitive abilities into different areas.
Perhaps the best thing about Cerebrum IQ is that it provides practical exercises for you to do to build upon your weaker areas so that you can raise your overall score. You can take the test as many times as you want, and work on improving your score with each subsequent effort.
It all takes time
Being successful in investing is something that takes shape over the course of an entire lifetime. If you follow the principles of investing wisely and make a consistent effort to improve your skills over time, you will surely see the results in your portfolio growth. If you make a habit of examining and adjusting your investments over time, you will come to both enjoy the process and gain a deeper understanding of it. And this will help you reach your financial goals by the time you retire.
