Introduction
Good morning wealthy family
It's a beautiful day, hope you're up and ready to learn some new financial lessons.
On the last episode of building smart investment portfolio, we we're made to understand that investing is something that is about balance, discipline and clarity. One must not be an expert in other to build smart investment portfolio, what is needed is a concrete plan and the consistency to follow through on those plans.
We also emphasized the importance of understanding your goals, managing risk, regularly investing and diversifying portfolio to ensure increased asset security.
Today I'm going to talk about the remaining aspects of building a smart investment portfolio.
Avoid Emotional Decisions.
One of the basis tenets of investing is the understanding that the market goes up and down. Smart investors understand that this is normal and therefore they stay calm.
Important things to know during unstable market times include
- Don't sell in panic when prices fall
- Avoid Fear of missing out (FOMO), don't buy because everyone else is buying. Always do your own research (DYOR).
- Avoid alternating with the market, stick to your goal. Sony follow the hype or fear.
One of major lessons I've earned from investing is that emotional decisions lead to losses. Discipline is key. A smart portfolio grows when you stick to your plan, not when you react to the ups and downs of the market.
As Much As Possible, Keep Cost Low.
One of the most grievous mistake to make in investing is to allow investment fees eat into your returns.
Therefore it is important to;
Chose low fee mutual funds or index funds
Avoid investment platforms or brokers with high transaction charges
Don't be in a hurry, do a proper check and balance, especially, check the total cost before investing.
As little as it may look, transaction fees and charges when saved or reduced to barest minimum goes to show how tactful an investor is and also how keen to details.
Make Out Time To Review And Balance Sheets.
Smart portfolios need regular check up, do not just set it up and forget about it.
Review it as frequently as possible, especially in the early days of investing.
Always take not of your asset appreciation and rebalance your portfolio.
If at any point in time or for any reason your financial goals change, also modify your portfolio to suit the adjustments.
The More You Know, The Better Decisions You Make.
A smart investor must stay educated and invest in continuous learning.
Learn from trusted sources
Investment guides are for your daily consumption, read them
Don't only focus on charts, follow financial news and other forms of fundamental analysis.
If you ask questions, you can never get lost, so ask questions so you don't repeat someone's mistake.
Don't Eat Your Seeds Before They Mature.
Always think long term. Smart investors are love marathon, they don't do the short quick sprints.
Wealth grows slowly but at a steady pace.
Avoid focusing on quick profits, instead look for long term benefits.
No amount is too small to invest as long as you are ready to give it the needed time to mature.
The first asset you need in your portfolio is $patience.
Conclusion
A smart portfolio is built through simple, steady decisions. You don't need to rush it, over time these small steps turn into real financial growth.
The earlier you start and the more disciplined you remain, the stronger your financial future becomes.
Thank you for checking out my blog, do feel free to drop your comments, upvotes and reblog. Also come back some other time as I will be dropping other important finance lessons.
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