The word “investing” can be a full sentence. The meaning of it might seem lost on all but those select few who are specially trained in the activity. However, for those that just dabble, learning how to invest can be intimidating.
When I was much younger, I took an interest in the stock market. Not knowing where to start, the internet became the first place to find information. Everyone seemed to be an expert, and I was just the lowly toad trying to glean knowledge from my betters. Unfortunately, with barely any understanding of what the difference between stocks and bonds was, it was months before I could explain the difference intelligently to someone else. Actually, that was one way I used to reinforce anything learned. If it could be explained to someone else and they understood, then it meant I was understanding it.
Flash forward and the experience was much better than it sounds. I was fortunate enough to come across a wonderful resource that allowed me to build mock portfolios and practice. It showed me how to watch the ticker and understand what the highs and lows meant. Moreover, practicing is the one reason why I do not panic simply because the shares are down. That was the first phase of learning that happened. As time passed, my comfort level went up and the ability to settle into a strategy that worked just seemed to happen. While I may be a long way from an expert, it was certainly the building block that gave me the conviction to do more than dabble.
Investing = Learning
Something any investor should remember is to never stop learning. Just like any other occupation investing requires continued education. The second is that you do not realize any losses until after you sell a particular investment. Basically, your strategy and comfort level will help drive the vehicles you decide to invest in. Investing is fluid, it changes rapidly and it becomes paramount to develop thick skin.
Learning to invest is all about the learning part. Moreover, not just learning what to invest in but how to invest as well. Those that are lucky enough to find a company that offers a stock investor workshop for members should dive in headfirst. Not into the investing part, but the workshop itself. Those are given by people who actually trade stocks, bonds, real estate, etc. Industry experts who can give sound advice on what a working strategy can look like. These workshops give newbies a chance to ask questions, give input, and make connections.
Consequently, building good habits will ensure investments pay off. This too is about learning different strategies that back up an income stream rather than detract from it. For example, a daily coffee habit of just two bucks a day adds up to more than $700 a year. This is money that can be used to add cushion to various investment accounts. These can be learned from someone who has experience in money management.
Finding a mentor who can be trusted to give good advice is something that every investor should have. The person chosen should have experience in the type of investing that you are interested in. If you are looking to invest in the S&P 500, they should first be able to explain what it is. Not only that, but they should also be able to either give access or assist in finding investment groups. It is rare to find the lone wolf investor. Most are affiliated with a group of people with who they discuss various investments. The group can give ideas and help with an understanding of different strategies that you may not have considered alone.
A reputable investing website or app will include essential information about the how’s and why’s of investing. This is especially valuable as there are many apps out there that claim to make smart investors of anyone using them. Regardless, it is still important to make use of all the information offered. An investment mentor can help make sense of the jargon.
It is critical to ensure that you are putting your hard-earned money in the best possible places. Also remember that the hype is exactly that, hype. Read the fine print. It is usually found in the asterisk down at the bottom of the page.
