Things To Know When You Want To Invest

Hey Guys
Today I will cover a topic dedicated to the newer guys trying to invest and better their lives in the future. When we talk about investments, it is important to also talk about the stage BEFORE we start investing. Which is just as important.

THE BASICS

I know some people don't like reading, but what can we do? In order to deal with investments in depth, we have to read a lot. So to say that we are complete investors, we have to have a lot of knowledge, but these will come with time.

When we haven't even taken the first step though, we have to start by learning the basics...Well the rest will come.

1. Set your expectations from the start. These must be in line with reality. No, 10% per month is not possible. IT JUST IS NOT! (and anyone who claims otherwise is lying)

2. You can't beat the market. Yes, you can't. And the sooner you digest it, the less money you will lose.

3. Learn how the markets works. It may seem very simple to some, but it is the basis for everything else.

4. Learn how stocks, ETFs, bonds , crypto and generally any investment product you want to touch work.

5. Never invest in something you don't know or understand. Like me I don't understand options and I don't touch them.

6. Learn how markets react to various events. Ok this might be a bit more advanced but it's good to know what happens in basic situations.

7. Start Investing , If you don't do the first step nothing then nothing else matters.

PLAN

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Something that most of us forget to do is to create a plan. Both for our finances and our investments. It is important, therefore, to be clear with ourselves about what exactly we want and what we expect from our investments, as well as how we will achieve that.

Of course, in the plan, we should also include our desires, meaning why we want to invest. Is it to build our retirement fund? To retire earlier? Or to create a legacy for our children?

Moreover, as we said about expectations, we need to clarify what we expect to get in return. Naturally, €1,000,000 in one year is not a realistic goal. And we all know that. So, we need to set some goals (which will not be taken from a science fiction movie) and follow them faithfully.

Alright… and after we've done all that, we need to see how we will achieve them. Because in every plan, we know that the implementation part is the most important; otherwise, we did it all for nothing.

Here, there are many options… day trading, stock picking, real estate, and so on…

DIVERSIFICATION

[source[(https://blog.shares.io/investing/investing-strategies/diversification-beginner-guide/)
How many times have we heard stories about "investors" who went all-in on a stock or, on a cryptocurrency, because they dreamt about it, liked its name, or, even worse, because a relative in the village recommended it? Many times.

How many times did we hear the continuation of the story, where the stock plummeted, and the "investor" lost all their money? Almost every time.

Where am I going with this? The point is that it's important, when investing, to manage risk and not just throw our money anywhere. But what's even more important is not putting it all into one stock. This is called diversification or "diversification," as we often hear. It protects us from the losses of a single stock in our portfolio.

The more assets we hold, the lower the risk of losing all our money. This is where the saying "Never put all your eggs in one basket" fits perfectly.

DON'T STAY OUT OF THE MARKETS

It’s better to be in the markets and experience the ups and downs than to stay out, waiting for the "right moment" to get in. In crypto this only applies to BTC.

https://fortune.com/recommends/investing/how-to-start-investing/

https://www.investopedia.com/articles/basics/06/invest1000.asp

https://www.lloydsbank.com/investing/understanding-investing/investing-for-beginners.html

https://www.fidelity.com/viewpoints/personal-finance/how-to-start-investing

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