If you ask any investor how they got started, you’ll probably hear a different answer every time. Investing isn’t like driving on a straight road; it’s more like a twisting road with surprising potholes and cows blocking your next move. Murchinson Ltd always talks about certain tried-and-true ideas, and while no approach is perfect, you don’t have to come up with a new one.
To begin, be curious. Don’t just give someone your money as you would a classic automobile; make sure you know what’s under the hood first. Get some reading done. Even if it makes you fall asleep faster than a lullaby, watch business news. Sleep through some monotonous breakdowns of your balance sheet. Your future self will be grateful.
Next, take care of your risk, or at least give it a fighting shot. Putting your money in multiple baskets is like not putting all your eggs in one; grandma was correct. It may seem monotonous, but having a variety of investments might help you stay afloat when the market becomes difficult. You might not believe it, but there is excitement in watching continuous progress.
If you ever buy a hot new stock just because everyone else did, stop and think. Hype spreads quickly, but so does regret when the bubble pops. Be careful, ask questions, and don’t be afraid to go against the grain. One time, my neighbor put all of his savings into “the next big tech thing.” If you question him about it, he’ll give you a look that is colder than the negative sign on his return.
The hardest part, though, is being patient. People will encourage you to “play the long game,” but waiting for your money to grow is like watching paint dry. It sometimes just peels off. Still, people who stay calm throughout storms and stick to good financial rules usually come out on top. Keep in mind that wealth that comes swiftly often goes away just as soon.
Don’t just go after returns; know what you’re doing. No matter what your goal is, whether it’s a new house in two years or retirement in thirty, write it down. These goals should guide your choices. It helps when the market drops and you want to panic. By the way, don’t freak out. When you sell during a dip, you usually lose money. Sometimes, just staying calm is half the battle.
Greed, fear, and FOMO are the emotions that may ruin good investing. Know your mental quirks. If you check your portfolio every five minutes, you might want to acquire a hobby or take a day off. Staring at the figures won’t make your investments grow quicker.
Know what taxes and fees are. You might not see them, but they can slowly eat away at your returns over time. Give them the same treatment as termites. They are small and unpleasant, but if you don’t pay attention to them, they can eat away at your profits.
Keep on learning. Investors that know what they’re doing have a greater chance, but there are no guarantees. Stay modest; the markets will humble you anyhow. And keep in mind that achievement is assessed over years, not weeks. Even experts make mistakes sometimes. Who are the best investors? Most of the time, they just get it right.