First, 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 and 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 click away. These are my top investment rules, and I hope you find them helpful.
Pick Assets Like How You Do Your Shopping
Most people would happily invest in a stock that they just heard about on TV, on YouTube, or on the bus, while they meticulously check many things before making other significant purchases, such as a house, a laptop, or a smartphone, that could cost a significant but usually smaller amount. I think we should apply the same scrutiny to our investments if we want to be successful. One should know the company they're investing in, understand the strength of their products and services compared to other companies. Approach it like how you do your shopping to make wiser investment decisions rather than just gambling.
Go More with What You Know
We all have our competitive advantage, in my opinion. Personally, I have a good grasp of technology with my background in software. That's why I'm adept 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. This helps me tell with more accuracy which companies are more likely to profit 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 often? My portfolio, though, is mostly in safe havens right now. Just saying, it's a decision I made with my knowledge in economics and monetary theory.
Think Ahead of Everyone
Market efficiency would almost always be there, except when investors are irrational or not looking at public data correctly. 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 in that field have not gone up yet? Or did you see a change in 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 in 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 pieces of information on this list. Thank you again for reading and enjoy a good life with me!
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