Safe investing should be the goal anyone thinking of investing for the first time. Of course safe investing means different things to different people. To some the idea of safe is actually to put their money on deposit. However from a stock market point of view let’s look at what safe means to new investors.
While investing in stocks and shares will always carry some of risk especially over the short term it is possible to minimize that risk. Safe investing is really just a matter of following some logic guidelines when it comes to that risk.
Some of the best known and most successful investors of all time which can include Ben Graham, Warren Buffett and Peter Lynch are all well known for looking for straight forward opportunities to put their money into. Warren Buffett’s approach of “KISS” or “Keep It Simple Stupid” is particularly the thing any novice investor can follow. He recommends never placing money into any venture that he doesn’t instantly understand such as micro technology.
The second guideline for the newcomer to stocks is to do your own checking before parting with any cash. As Buffett says “A public-opinion poll is no substitute for thought.” If you are planning to make an investment doesn’t it make sense to check things for yourself? All things considered no one will ever take as much care of your money as you will yourself.
One thing which many people tend to forget when they first start to invest in the marketplaces is that they are investing for the medium before long term. If you have that clearly in the forefront of your mind you will make much safer investment decisions. That’s simply because you’re far less likely to panic if you see the price of your stocks fluctuate dramatically.
Another basic is something you no doubt heard as a child – “never put all of you eggs in one basket”. It’s as true today as it ever was and will be endlessly no doubt. Of course we all want to be in at the bottom of the most recent, greatest stellar investment but to put all your cash right into that one stock isn’t investing its gambling.
By adhering to these few simple guidelines you can ease your mind and sleep soundly at night without fretting about your portfolio. Maybe you would not have quite so many massive winners but you will certainly enjoy safe investing.