Investing isn’t something that comes naturally overnight. To obtain success from investing, you need to make sure you know your way around the financial world and have the right knowledge and information about the market you’re in. Investment success takes time and often requires a lot of patience; and if you’re in the very beginning stages, you can prepare yourself for moments of trials and error. If you’re new to the world of investing or are looking into how you can improve your decisions and results, consider some of these tips:
Know the Market
As an investor, one of the most important things for you to know is how your industry and the market work; you want to know what works best in the market you’re investing in.
Conduct the proper research and read different investment materials that you can take valuable information from. You should have your market down to a science; once you do, you can assess what the best investment strategy would be moving forward. Famous investor, Warren Buffett, says “If I cannot understand it, I will not invest in it.”
Determine Your Investment Strategy
Your investment strategy is often based on your personality traits. Are you a more careful investor, or do you like to follow the latest investment trends to keep up with everyone else? According to the Bailard, Biehl, and Kaiser (BBK) Model, there are five different categories of investor types, they are:
- Individualists: Independent investors with confidence in their decisions and ideas. They’re careful with their decision making, and do the necessary research; generally, they like to make their own decisions.
- Adventurers: Usually willing to take more of a risk and trusts their own decisions. Generally reluctant to consider advice from other investors.
- Celebrities: “Celeb” investors like to focus on what’s popular or trending, investment-wise. They will likely consider the advice and information from other investors that have similar investment interests.
- Guardians: More reserved, and tends to stay away from risks or taking big chances. They are more concerned about long-term investments and how it’ll affect their future.
- Straight Arrows: Generally a sensible investor that is secure in their decisions. They don’t shy away from risk, but they do expect to earn a return out of it.
Work With Others, but be Cautious
Investing all on your own, especially in your beginning stages can sometimes come with a substantial amount of risk. To limit some of this risk, find a reliable and trustworthy investment partner. By working with another investor, you can maximize your investment power and get a better sense of what opportunities offer the greatest potential. However, always remember the investor types from the BBK Model. You want to make sure you’re working with investors that work well with your personality.