Useful Investment Tips
1) Know yourself. It is essential to know its tolerance to risk, its heritage, its saving capacity, its temporal horizon and the final and concrete destination of its investment. Are the elements defined here coherent and compatible?
The best thing to do is to think what you would do if your investment decreased dramatically. Would you sleep quietly, sell or increase your participation? Are you able to buy in times of crisis (when they all sell), and wait and sell when the market is euphoric (when everyone buys)? Selling in panic Times is not the best option because your decisions are emotional.
2) Every investment rests on three pillars: profitability-security, liquidity and taxation. Don’t try to find the philosopher’s stone. It’s about eating a good paella and sleeping well. Each product has its advantages and disadvantages.
3) plan. Without planning and organization it’s hard to make money. Preventive and non-palliative policies need to be carried out.
4) It is difficult to know what your investor behavior will be if you have not passed a full cycle of profit and loss. So if it is primer start slowly until you have completed a cycle, investing through a fund (will take advantage of diversification) to get used to price fluctuations.
5) The money to be allocated to an asset at risk (bag, property, art, gold) or illiquid should not be needed in the medium term.
6) Decide whether to self-manage the portfolio (which requires time and resources) or to delegate your management (which requires finding only the entities you trust in exchange for a reasonable price).
7) If you decide to self-manage, start with the sector or product that you know best, either because you work in it and you can control the evolution of your results or because you have more information than the average of the market. Do not over-rotate your wallet, or be tempted to make trading, as only intermediaries win. Arrange a few periodic tasks to see the evolution and the progress of their portfolios.
8) to materialize your investment, make a systematic savings plan. This will buy more stocks or shares when the value of them goes down.
9. See if you can explain in five minutes to your wife what the reasons are for investing in that asset or value. If your wife doesn’t understand you, you may not be sure of the reasons. Don’t buy what you don’t understand or don’t know how to explain. Know where you invest, why and why. Take care of your investments as your pets.
10) Check investment objectives in the medium term and once achieved reduce substantially their investment. The market offers every four or five years great opportunities because it moves through cycles. comply with acceptable and reasonable earnings. Don’t be greedy and consolidate profits from time to time.
11) Be wary of rumors. When they come to you they are no longer rumors and if they are, they are interested.
12) Make a fictitious test of your investments for a year before you begin what will allow you to equip yourself with the necessary tools for your work.
13) Buy realities, not expectations; That is to say well managed and branded companies. Start by buying large, consolidated values.
14) diversify by kind of asset (art, real estate, fixed income, equities, pay, gold, etc.) in time, by countries (emergent-developed) in the prices of entry, in type of management (value-growth, small-large companies). But if you want to obtain a good profit bet on those assets that in the medium term give greater profitability (stock exchange,-particularly of emerging countries-, shares of value, shares of small companies and shares with high profitability by dividend). The rest of the assets will serve to mitigate volatility or price variations. If you know a business very well bet more money on it.
15) A method that serves to compare absolute and relatively different kinds of assets is that of the PER, which tells us the number of years it takes to recover my investment via interests, dividends, rentals etc. Use and ponder more those assets with lower PER and an acceptable risk.
16) Choose from five to nine values from different sectors previously analyzed and from large companies, since their risk in principle is lower. Determine those variables or facts that would reconsider the suitability of your investment. If they give, sell without laziness and not fear to assume losses. The justified sale even losing becomes many times the best decision since the value continues to fall.
17) Follow the evolution of the economy. Increase the risk position when on the front pages of the newspapers talk about financial crisis and reduce your position when we are in the best of the worlds, because then we can not improve. The financial cycle has been in progress for nine months on the real economy.
18) Do not follow the gurus. Find out and find out for yourself and be light years away from others.
19) Markets always exaggerate and usually tend to average. All markets have an irrational component.
Have common sense and think that everything that goes up/down a lot in a short time normally fixes. Have humility, patience, serenity, discipline, and the spirit of learning.
21) If you opt for a multi-product entity, sit with the consultant to determine the combination of those that best suit your interests. Pay commissions solely on the basis of the profitability achieved either absolutely or relatively depending on a reference index or frame. If you choose a passive management or indiciada choose that entity with lower management commissions, deposit and with lower total expenses on the estate.
22) begin to invest little by little and by the simple assets and values… Usually the complicated, dark and unintelligible is linked to lower profitability and excessive risks.
23) Sit down with your counselor once a semester to see if the objectives of your investment will be fulfilled. Exíjales explanations and determine the most likely value of your investment for the next few semesters, with your range of variation.
24) Not being on the market the key days of the big climbs can be disastrous for you.