In the end, principles are the foundation of our decision making. So have solid principles when it comes to investing in rather integral to success.
A few good Investing Principles
- You have to be aggressive and defensive in investing
So what exactly does this mean? Basically, when the opportunity arises you must take big swings to make real money, but at the same time you need to make sure that if that swing misses it isn't so big it knocks you out of the game.
- You can never be more than 20% diversified within the same asset class
Easiest example - cryptocurrency. If you are only invested in crypto then your risk (and reward) is a minimum 80% tied to that market now matter how many cryptos are invested into. Yes, there can be a couple outliers that buck the trend, by the majority track the market.
- The trend is your friend
This is probably one everyone has heard, but it still hold so true. Think about the past two months in crypto; every time we tried to buy a bounce we were left disappointed because the rallies would fail being we were in a clear downtrend. Recognize the larger trend and invest in that direction, why fight the current?
There you have it..
Just a few simple principles to use for successful investing!
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Disclaimer: All info in this post is my opinion and for informational purposes only
Free e-book: ScaredyCatGuide to Knowing What the Heck Bitcoin Is
Disclaimer: All info in this post is my opinion and for informational purposes only
First step: Sit down for ten minutes without doing anything. Relax, take a deep breath, then think about what you admire in others, what you with you were but aren't, what you'd like to truthfully describe yourself as to a new person.
Then: Before you go to sleep think about what you want out of tomorrow. You can write it down, you can just briefly consider it, whatever. Do tomorrow's goals relate to your future vision of yourself, if even a tiny bit?
Upon awakening: BEFORE you look at your phone, before you get up and start scrolling, think about what you're going to do today. Is it one task? Is it eating a healthy meal? Is it reading a little bit from a book you love or a subject you know nothing about (yet)? Is it taking an online course? Is it subscribing to a couple of YouTube channels that teach the things you'd like to know?
Spend some time before you kick the day off thinking about who you'd like to see yourself becoming, then do at the very minimum ONE thing to go in that direction. When you do, reward yourself with positive thoughtful reenforcement.
You did it! You invested in yourself! If you do it consistently, you'll find that you enjoy it. You'll become more important, future you will become more realistic, and you'll become yourself.
You're worth it!
EDIT: Wowza, Reddit Gold! Thank you all so much! Honestly though, I'm just happy that some of you are motivated by this to become the people you'd like to become. Stay posi!
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Good statement! Doing something each day in the direction of a goal or desire adds up before we even realize. Time goes fast and it's each step of a b c d e f g...that gets us to complete the alphabet before we know it.
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Wow ... more great advice on principles.
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I really need to start buying some stocks.... the problem is that the stock market is so confusing sometimes!! Taxes on the stock market make me not want to buy because, first it's hard to do the extra taxes, second i don't want to give part of my earnings to a gov that i don't support!
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I hear ya. If you are holding things for long-term it reduces the tax prep burden. Plus its only a few transactions it rather easy. The paying taxes part I agree on....can always do it in a Roth IRA and then you don't pay taxes on it...well after your are 55 years old atleast.
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Great reminders...I became and gravatated to going with the trend after reviewing my results and founding out most of my successful trades were with the trend.
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Yup, reviewing results or even keeping a journal is such a great teacher!
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Interesting on the 20% diversification principle! Thank you for the post and good luck!
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Yeah, it surprised me when I came across the research some time ago.
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Nice post Scaredy...I need ya to spell it out for me sometimes.
Thanks!
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I do what I can....from time to time I stumble on some good advice! ;-)
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