Firstly, this is not financial advice but just my opinion on how to make a successful investment portfolio and therefore become a successful investor in time. Most are based on my personal experience as well, though could be credited to those who came before me, people I consider as the wise men of the investment world. As always, I do suggest that everyone do their own research. We're already in the information age and information is just a type away. These are my top investment rules and hope you find it helpful.
1.. Pick Assets Like How You Do Your Shopping
Most people would happily invest on a stock that they just heard about on TV, on YouTube or on the bus, and that is while they do and check so many things before doing other big purchase, like a house, a laptop or a smartphone, that would cost a little fortune. I think we should be the same with investments if we want to be successful. One should know the company their investing on, the strength of their products and services compared to other companies, again, do it like you're doing your shopping, to be able to make wiser investment decisions than just plain gambling or relying on a few information accumulated somewhere.
2. Go More with What You Know
We all have our competitive advantage in my opinion. I personally have a good grasp of technology with my background in software, reason why I'm good at recognizing actual and relevant technological breakthroughs or innovations versus just good marketing. It's the same knowledge I use when buying a computer or a smartphone so I am able to tell with some accuracy which companies are more likely to profit more on a certain product or service due to its features and the market it is catering to. If you know more about a certain sector, why not try your investment skills there more? My portfolio though are mostly on safe havens right now, just saying, it's a decision I made with my knowledge in economics and monetary theory.
3. Think Ahead of Everyone
Market efficiency would almost always be there, except when investors are irrational or not looking at the data. It's when risk and possible profits are already priced in, and that's the reason why I think it is important to think ahead of everyone (just not too ahead I think). Do you think the price of a commodity would go up soon but investments on that field has not gone up yet? Or did you see a change on consumption in your community and think that it's not just in your neighborhood and would affect the price of a company's stock in the future? Such information would be useful on predicting future prices that you can use to make wiser investment decisions by moving first before everyone else.
As always, I like it very simple, so I only have 3 but very useful information on this list. Thank you again for reading and have a good life with me!
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