As an experienced financial consultant of some repute, I have helped many business professionals in Johannesburg become better investors. This has allowed them to reduce the risks they take on whenever they commit money to new projects, while also allowing them to see greater returns that they can put towards other ventures.
My track record in this area is impeccable and I hope to be able to share the knowledge I have gained through my work with other prospective investors through BlitzPenny.
So the key question here is how do you become a better investor? There is no guaranteed formula, but by following all of these steps you increase your chances of finding success.
Always, Always Do Research
There’s a reason why doing the research is at the top of every informational article related to investment and I’m not going to buck that tradition here. Simply put, finding out as much as you can about any investment opportunities you are considering is crucial because it allows you to understand the risks involved with the project, ensures you aren’t getting involved in something that could be seen as sketchy when it comes to legality and also allows you to learn more about the people you’re investing in and any history that could be relevant.
A lot of investors rush through their research, either because they are being put under pressure by the people they are considering investing in or because they want to grab what looks like a golden opportunity as quickly as possible. However, rushing leads to mistakes being made. You should always take your time and cover every single base in your research. Know everything there is to know about the project, the company, the people behind it and their histories. If you keep getting pushed to invest when you aren’t yet comfortable in doing so, consider moving onto something else, as this pressure is often an indicator that the people who want your investment may be trying to prevent you from finding out something important. There will always be other opportunities in the future.
Know Your Limits
Investing has the potential to put you in a bad position very quickly if you try to push yourself beyond your means. Before you commit even a single penny of your money anywhere you need to understand where you are financial and what you can be comfortable losing without putting your business, your family and yourself in trouble. Create a budget and look for investment opportunities that fit within your means. It can be tough to pass up something great because you don’t have the budget to commit to it, but remember that even the strongest investments carry some risk and the prospect of losing it all is too dangerous to stretch outside of your budget.
Talk To People
Networking is important in investing as it offers you the chance to pick the brains of people who have been there and done it all before. The people you meet can offer knowledge and opportunities for you to take advantage of, plus by talking to people you can build a reputation in your local business community. This can make it more likely that people with good investment opportunities seek you out. The key here is to treat everybody you meet with respect and consider every interaction you have as a learning experience.
There’s an old idiom that talks about the dangers of putting all of your eggs into one basket. This is so relevant to investing, particularly if you are going to focus on the stock market. Diversifying your portfolio is advice that gets thrown around a lot, but it really is important in terms of protecting yourself in case one of your investments go bad. If you commit everything to one project and it fails, you see a massive loss that is difficult to recuperate from. Committing smaller amounts to multiple projects increases your chances of staying stable, even if one of them doesn’t pan out as you’d like.
Anybody Can Do It
One of the biggest things holding potential investors back is the thought that it is only a game for people with a lot of money. That is really not the case. No matter what you bring to the table, there is always going to be an opportunity for you to invest in. Starting small isn’t necessarily a bad thing either, as it allows you to gain familiarity with the markets you’ll be investing in, while also lowering the risk factor that causes so much fear in investors. Speaking of which…
Control Your Fear
All investments carry risk. It is just a fact that you are going to need to become comfortable with if you are going to get better. The trick is finding the balance between respecting that risk and confronting it. Going too far with respecting the risk could eventually lead you to fearing it, which may result in you not taking golden opportunities even when you have done everything right in terms of researching the investment and ensuring you are capable of handling it. Of course, going in the opposite direction could lead you to becoming reckless, so it really is a balancing act.
Think To The Long Term
Most people don’t make huge money in small periods of time when investing. This means you need to have a plan of action in place that considers the long term viability of any investments you make, escape plans for if things don’t go how you predicted and ideas for where you may invest later on. Always keep one eye to the future when committing your money to any endeavor and don’t make the mistake of thinking that you will come away from any investment with an instant return.
Find Out More
Hopefully I’ve given you some useful information here that will help you to make the most out of your journey through investing and become better in the process. However, if you would like to offer more advice or speak to a professional financial consultant to learn more then please do email me at [email protected] or contact me using the forms on the site.