Thursday, January 30, 2014

Simplifying Your Investment Strategy And Love What You Do

By Andrew Block


Are you making investing more difficult for yourself than it needs to be? Do you find yourself scrambling to make a decision about an investment or are you unsure of whether you should get into something or not? Following the latest trend or piece of advice that you heard about makes things more difficult than they need to be. Life is filled with enough work and where to put your money should not be a chore. Often it is the fact that we are way outside of our comfort zone that causes us to hesitate and either wind up missing the entry point on an investment or we miss the chance all together.

A more simple approach and one that is more natural in both planning and execution might suit you better. By stepping too far outside of your comfort zone with an investment you waste a lot of time. When you first find out about an opportunity it is going to take time to research the market, company or type of investment. You could just jump in with both feet but often this is a foolish move and money is lost. Researching and becoming knowledgeable about a certain type of investment wastes time and often once you are comfortable with the investment, that opportunity has passed.

To make things more enjoyable and more profitable, it might be wise to chose a market or niche that you have some interest in already. Being able to avoid much of the time it takes to get up to speed and make heads or tails of what is actually going on can be avoided. If you already have some specialized knowledge or background in a market then you will be ahead of the game. Doing further research is quick and easy and you'll actually be enjoying this process rather than feeling like you have homework that you need to do every night.

For instance, there is no sense in putting your hard earned money into collectible art if you have no passion for art. Likewise, it will be torture for you to pick stocks if you hate looking at numbers, charts, and reading news about the company that you're thinking of investing in if you have no faith in that company. While it's good to remove some of the emotion from your decisions, if you have no interest or desire to obtain knowledge about what you're putting your hard earned money into, you will likely lose interest and be off to chase after the next shiny object that promises to make you money. It is sometimes necessary to look at investing as a long term plan. Think of it like a hobby that helps you to earn money.

Next, make sure that what you're hoping to invest in actually has some value either real or perceived. Knowing the true value of things that interest you comes into play at this point. Having knowledge that the general public might now hold can help you to find things of value that are overlooked by the typical person.

Finding a painting by a famous artist or a collectible car parked outside a barn in the countryside are examples of having knowledge that most people don't have. Seeing a trend in the stock market or understanding the dynamics behind gold investing are a few other ways that having an understanding for these markets can benefit you.

Everybody knows that a true investment is one that you can buy at discounted price and then sell later at a higher price. This is the whole focus of investing and it is the only way that we make a profit. You have knowledge of the market and you know the value of things so you will know when you have found a good deal or not. While it might be tempting to become emotionally attached to something like a painting or a car, you should try to remove as much emotion from your decision as possible. If the price is simply too high and you are doubtful that you will be able to turn a profit then you have to pass on that opportunity. Wait until a later date and a better opportunity will come along. Also, removing emotion when it's time to cash out is another place where you need to remove emotion when it comes to your investment. Don't worry. There will be another opportunity coming along before you know it.

Knowing when to sell is every bit as important as knowing when to buy. Knowing when to cash out and move your dollars from an investment that has served you well into a new opportunity is the sign of a wise investor. You did good. You found a bargain and knowing when the value has peaked is also a part of the game. Long term investing is great and it is how you should look at each opportunity but when the time comes, don't allow your emotional attachment to a stock or a part of your portfolio to overcome your sense of reason. You can even set a goal beforehand and once that goal is reached you will execute the sale without emotion or doubt.

Avoid complicating your investing at all cost. Get into markets that interest you and strive to learn something new every day. If you are passionate about your investing and in the markets that interest you then your bottom line will show it. If you force yourself into markets that you have no interest in other than to profit then you will come to dread the entire process. Building wealth doesn't have to be boring and you don't have to get into the stock market or futures trading because someone told you that it's a good investment. Follow those things that truly interest you. If you have an eye for art then by all means invest in art. If you're a backyard mechanic on the weekends then by all means invest in a classic car that you always dreamed of having. When you invest in your passions you have no way of losing. Even if an investment goes south, you can still be happy with the process and with holding onto your investments until they do turn a profit.




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