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3 Basic Tips For Investing

by Stephanie J. Bradberry 2 months ago in stocks / investing / advice
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What I Wish I Knew Before Investing, But Now I’m Gaining Over 200%

How I Got Into Investing

I landed my first teaching position before I actually graduated from college. So, I felt pretty pumped to start stacking money to pay off my student loan debt. In September, I flocked to the fold of sheep who started contributing to an IRA. Sure, a pension sounded lovely. But would that really be enough 40+ years from 2004?

You see, I fell into that category of starting so young that even when I reached 25 years in the public system, I would be too young to retire or collect. Therefore, I wasn’t just going to settle for a pension a million years later. I felt like I was taking control of my retirement. But I didn’t know the difference between a Roth IRA and an IRA let alone that a SEP-IRA existed when I eventually became self-employed.

Fast forward. I found myself forced into an early retirement from the state (after only three years of high school teaching and some adjunct professorships) with a trail of a state pension, several 403bs, and a 401a. I’m sure there was a 401k in there somewhere. So, I went to a financial advisor to help me consolidate all my scattered investments.

It took time and work, but the consolidation got done. Then, my financial advisor made a move with my money that I did not authorize or know about until my statement came and I lost $500 with one trade. How could she invest my money in something that was taking a nosedive and not tell me?

That lit a fire in me to fully take matters and my money into my own hands. My next step was rolling all my little bit of investment into Fidelity. I certainly wasn’t a big baller, but I had a goal, vision, and starting point. There were many ups and downs and open and closed accounts in my investment journey. And I would like to share three basic tips that I wish I knew before I started investing.

Tip 1 For Investing: Determine Your Investment Model

You want to dive right into to earning some cold hard cash, right? Well hold your horses. While there is nothing wrong with wanting to grow your nest egg or create some generational wealth, take a deep breath. Why? Because despite all the warnings about the risks of investing, when investments go south, the investor is looking to blame everyone but him- or herself. So, it is better to plan. After all, if you fail to plan, you plan to fail.

Personally, I find either one of the two following methods the easiest and most sound to implement: David Swensen Portfolio (Yale Model) or the 80/20 Rule (Pareto Principle). If you want to see a simple breakdown of these models, you can download my free E-book here.

Quite honestly, it does not matter what method you choose. It’s more important to pick something, try it out, and adjust as needed.

Tip 2 For Investing: Pick Based On What You Like

Here is what it boils down to. You would not invest money in a meal you already know you do not like. Therefore, why would you invest in a stock or investment that you do not believe in, like, or already support?

I personally have made my biggest gains from companies people would normally not think twice about. But I chose them because they were places I already spend my dollar personally or for business. One of these positions (a stock) in my portfolio has been gaining over 200% for months in 2022. Yes, a 216+ percent gain during a recession. I call that a winner!

Many people get into investing “to make the most money” or “to get nothing but major gains.” In doing so, they end up with a portfolio laced with companies that are doing more harm than good. But the average investor does not care or does not pay attention because they either copied someone else’s portfolio or went along with a “specialist” in the field of investing instead of doing their own homework.

The point is, many people will try to sell you on the “best” new investment or a great “insider” tip. But if you are not personally choosing investments you like, then you are going to end up miserable (can’t put enough emphasis on this) when that investment starts losing.

Investing requires a shift in mindset. The potential of gains from investing are exhilarating. But at times you will need to curb your enthusiasm. What is a good stock, bond, crypto, mutual fund for someone else might not be the best for you, your portfolio, or your wallet.

Tip 3 For Investing: Do Your Own Research And Investing

But that’s what advisors are for, right? Certainly, if you have the money and do not want to spend the time knowing how to invest or the ropes of the stock market, cryptocurrency, et cetera, then by all means get an advisor. However, I got burned one too many times by “experts” and financial advisors. Also, I tend to be quite frugal in everyday life. I save money—that I can then use to invest more—by doing things myself. And as someone who loves to read and is a life long learner, I like knowing things for myself, not just what someone else told me.

Even if you are horrible at investing, you will be doing just as good, if not better, than the professional. Here’s what most investors and professionals won’t tell you: everybody is guessing. Everybody. Some are just using a specific theory, logic, history, and so on. Monkeys throwing darts at stocks posted on a board faired the same as experts picking stocks (true scenario). Are you motivated enough to do this on your own now?

Once you gain knowledge about one aspect of investing, put it into use and try it out. You don’t have to wait for a professional to make the trade for you. The best part is you get to earn while you learn! A total win-win. As long as an investment has a solid history, often just holding the position long enough will mean you at least break even or have some gain.

A Note About Investment Information:

Information contained in this article is for educative and personal use only. It is not to be used in place of professional advice. Use the information and suggestions at your own discretion. Investments carry varying risks. Investment options might not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from a professional and reputable financial advisor.


About the author

Stephanie J. Bradberry

I have a passion for literature and anime. And I love everything involving academia, health, metaphysics and entrepreneurship. During my free time I enjoy nature, crocheting, reading, romping with my kiddos, oh and writing!

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