Investment Checklist: 4 Things NOT To Do When Investing
Investment Checklist - What Not To Do!
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. Our investment checklist has been positively received by the general public, especially our first publishing about Investment Checklist.
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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.
4 Things NOT to do when INVESTING - Investment Checklist
Okay, so you still want to invest yourself. Here are 4 important things NOT to do:
- 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. As discussed in our Investment Checklist, do the same with your long term investing portfolio. Look at the big picture.
- 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, as well as being a part of our Investment Checklist.
Financial investment checklist
- Don’t Panic When Prices Drop: A lot of investors freak out when the market drops. What you really need is When you are in it for a long run, your investment pays off by controlling the damage to your portfolio when there is a drop in the markets. That means, this may actually be a good time to buy more of your stock. In a bear market, many so-called experts will start touting doom-and-gloom scenarios. Warren Buffet says don't let world events affect your investing decisions. Buffett say even if he knew a big war was unavoidable, "I will still be buying stock. You're going to invest your money in something over time. The one thing you can be sure of is if we went into some very major war, the value of money would go down. The last thing you want to do is hold money during a war.
- Don’t Buy When Prices Rise: Unfortunately this can happen to the best of us. And it is thanks to the massive amount of market noise everywhere you turn: Social media, TV, radio and even people on the subway. The media get overly excited when the markets are rising, but little do the long term investors know: What goes up, must come down. Another error that cuts seriously into many investors results is the error of selling a winning stock too soon. Though it might seem that this is a relatively minor problem, it actually is a very serious error because it robs you of your really big profits.
Grow Your Wealth - Investment Checklist
Investment Checklist - Footnote
To sum it up, stay true to your investing mentality if you have decided to be one. Changing into a day trader in the middle of a long term investing plan can cause you major losses. Following our pilot article about Investment Checklist, check out my next video to learn about things to do, if you choose to trade the markets instead of investing.
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