Sometimes too much information can be overwhelming; many people decide it’s too hard or they’ll start later. The best way to improve your long term chances of success in investing is to start now – small actions now have a huge impact over time. Start a savings account with a regular direct debit, buy an ETF every month, or increase repayments on your debt – choose one or more simple actions and start today. Even better if you can automate them; discipline is overrated.
“Don’t put all your eggs in one basket” – Humans are rather strange, we research buying a fridge, a car and even our makeup, but when someone gives us a hot share tip, we pile all of our savings into one idea. Always diversify your risk, don’t pop all your savings into one share tip. Investing across a number of shares or a couple of different ETFs over time, means if something goes wrong with one of the investments, you will not lose or suffer losses on everything you have invested.
Be patient and invest for the long-term. Shares can be volatile, prices go up and down. If you have a good plan, then you can see your way through the swings. Remember not to fall in love with a share, meaning you can take profits on the winners and always sell the losers. Experience will help grow your confidence, so never stop learning. It is normal to make mistakes; the key is admitting when you are wrong and changing your tact. Hubris is the worst enemy for share investors, you won’t be right all the time and just when you think you are very good at it, the share market will remind you who is boss. Think long term and invest steadily over time to average the cost of the purchases.
There’s a lot of complexity and noise in the investing world. It can be overwhelming for the best of us. A recipe for success is to focus on the things you can control like: