After reading the tutorial session, I believe now you have understood the basic conceptual knowledge of investing. Before diving into investment you need to figure out the path or the direction. Choosing a right direction would lead you to move ahead. “Right path will help you to become a Smart Investor” else it would lead towards fall of investor. To examine yourself there are few parameters to do so.
“5 Rules to Become a Smart Investor”:
- Step 1: Be fully aware of investment process.
- Step 2: Learn to choose right move.
- Step 3: Stick to your drafted investment plan.
- Step 4: Review and Monitor your investment.
- Step 5: Learning is an experience.
Let us understand in detail, “key points of smart investor” and “what it takes to be a smart investor and good investor”:
Step 1: Be Fully Aware of Investment Process:
When you start learning about investment, you should start with A for Apple and B for Ball. If you start learning from half away from knowledge, you will be always in trouble. Let us take a example: you go to medical store and ask for cold and fever tablet. You use the medicine given by medical store for next 5 days but you fail to recover. Here is the biggest trouble that you are unable to figure it out the cause of failure, you do not know whether prescribed medicine was not for cold or fever or it was not recovered due to other medical problems. If you are unable to identify the cause of problem then you will never have the opportunity to learn from your mistakes. It may be obvious that you may repeat the same mistake again and again since you are not aware of the root cause of the issue. So it is recommended that when you are learning about investment, start slowly, start systematically is the only way to achieve towards goal to become a Smart Investor.
Step 2: Learn to Choose Right Move:
After that you are aware of the concepts of investment, you have drafted your plan on notepad and you are ready to fly than little bit of additional research like current affairs, trends, expert opinion, valuation, risk, etc for your selected assets are extremely important. For example: You wish to buy in Infosys stock looking towards past performance and it looks to be good performing asset, than let me tell you have made a right choice. But suppose in current affairs and news you go to know that company has shut down few of its operations and looking towards restructuring for coming year. Apart from this company has not performed well in last two quarters and has booked huge losses quarter on quarter, In such case let me tell you that this is not the right time to invest in the company. This is what you have to figure it out for your assets when you are ready to fly and taking one step ahead to become a good Investor.
Step 3: Stick to your Drafted Investment Plan:
Trends are made-up of up’s and down moves, whether it’s your life trend or stock trend there cannot be only uptrend or only downtrend but overall you will be satisfied with your life or your stock performance after a long period of time. Same mentality need to be applied for your investment plans as well. To become a smart investor, do not let your worst time to spoil your investment plan by making physiological decisions. Smart Investors are those who do not let their emotions to control their investment plans.
Step 4: Review and Monitor your Investment:
Once you have started with investment decisions than keep monitoring it on timely basis. Apart from this keep reading current affair of your invested assets which will assist you to make further decision like if you want to invest further capital or reduce investment or removing complete investment from those particular assets which are not performing and many other decisions. This way is the the right way towards how to become a Smart Investor.
Step 5: Learning is an Experience:
If it’s a life or a game or an investment, only person who wins this gain is the one who learns from mistakes. Mistakes and learning is the maturing processes for life, game or investment. Keep learning, Keep improving is the only fundamental and win-win strategy whether it may be life, investment or a game. Let rest of the winning strategies keep it on experience. To become a smart investor turn your failures into learning and experience as a step stone of success.
- Tutorial Course - Basics of Investing for Beginners -
» e-Learning Chapter 1: What is Investment and its objectives.
» e-Learning Chapter 2: Why is Investment important for Economic growth.
» e-Learning Chapter 3: Ways to Invest your money and make profit.
» e-Learning Chapter 4: What are the Best Investment Opportunities for your Retirement Income.
» e-Learning Chapter 5: What are the Legal Matters you should know before Investing.
» e-Learning Chapter 6: Different Types of Investment Risks Involved in Investing.
» e-Learning Chapter 7: When and How to Invest in Stocks.
» e-Learning Chapter 8: How Positive Attitude can improve your Investing mindset.
» e-Learning Chapter 9: Should you Borrow Money to Invest in Stock Markets or Funds.
» e-Learning Chapter 10: 5 Rules of Thumb: Key points to be consider before making Investments.
» e-Learning Chapter 11: How to Calculate Stock Market Returns, Break Even Point and Basis Point.
» e-Learning Chapter 12: How to Calculate Compound Interest and Simple Interest.
» e-Learning Chapter 13: Rule of 72, 114 and 144 of Compounding Interest formula.
» e-Learning Chapter 14: What is the Difference between Trading, Investment and Speculation?
» Currently Reading: How to become a Smart Investor or a Successful Investor.
» e-Learning Chapter 16: Tutorial Quiz – Basics of Investing for Beginners Module.