It is clear that all investors invest with just one common goal which is to make money and preferably large amounts of it. Any investment strategy that you use, which will not make you money is a definite failure, it’s as simple as that. Successful investment can come in many different forms and even so, they will have some common qualities. Here are some great tips on how you can invest successfully and increase your chances of actually making the profit that you want to get.
Minimize All that Fees
When you are buying equity or a bond, you should not just pay for the asking price. It will take a few middlemen to match up the buyers and the sellers, then process the payments and so on which is why all types of fees come into the equation and are pretty much inescapable. That being said, you can also keep your fees to minimum and potentially have the ability to save large amounts of money in the long term. Fees that usually looks mall can take a large chunk out of your portfolio in reality. Now fund managers are important, they may charge fees but they will also advise you on the investment strategy that you are taking and whether or not that is a good choice. You can look for fund managers Melbourne or the likes based on where you are living. Banks and brokerages also will charge your account holder fees which can be annual or monthly. Brokers will charge you commissions when they perform transactions. Before you open up any funds or accounts make sure that you are very clear on the fees that are involved and choose the lowest alternative that will meet your needs.
Buy and Hold
Skip the day trading please. It can sound like a million-dollar idea in theory but every single study that has been done shows that even during excellent bull markets, timing of the market will not pay you as much as buying and holding investment for an extensive period of time. For one thing it is virtually impossible to time a market to perfection and just one tiny slip can eliminate all the success that you made in your recent investments. Even if you happen to get your hands on some magic crystal ball and avoid all the timing mistakes, the commissions and the fees and the capital gains taxes that you will pay would take out a massive chunk of your profits. But on the flip side, if you can hold on to your investments for at least a year before you trade them you will have a better chance of maximizing profits and returns.
In diversification, two plus two equals six. One of the basic tenets that you have to know in investing is that high risk investments will bring you higher returns on average. However, do keep in mind that this is on average. There are many high-risk investments that can also go sour. When you diversify choose investments that can react in different manners. For example, when the interest rates are climbing, stocks will also gain value and then bond prices also decline.