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The ten golden rules of investing

Posted by on May 22, 2022 0

As a way to celebrate Financial Literacy Week, it seems like a good idea to review the ten golden rules that can help investors stay on track with their investment plan, so that they can achieve their goals. While they do not guarantee success, no matter how disciplined you are, they can be of great help.

 Defining an objective or goal is essential before deciding to invest

Knowing what your financial goals are and the period, or investment horizon, in which you expect to achieve those goals, can help maintain discipline in following the defined strategy. For example, if your goal is long-term, such as saving for retirement, a date that may be several decades away, by having a alameda research portfolio date you can avoid the temptation to cancel the investment while you are still working .

 The higher the potential return, the higher the level of risk

The prospect of higher returns can be very attractive to the investor, but usually also comes with a higher risk of loss. Think carefully about your level of risk, because not everyone can handle a high level of risk. In fact, some may be more comfortable opting for less risky investments, even though the returns are likely to be lower. In any case, do not forget that there are no investments without risk and you must always bear in mind that there is the possibility that you not only do not win, but that you recover less than the amount invested.

Diversify

“Don’t put all your eggs in one basket” is a well-known saying that should not be forgotten when it comes to investing. Spreading your capital across different asset types and geographic areas reduces your dependency on poor performance by any one asset or region, which rarely performs the same. In this way, if one of them malfunctions, other investments could compensate for these possible losses.

Invest for the long term

You should never consider the goal of investing to be “get rich quick.” In fact, it would be a big mistake. It is advisable to hold an investment for at least five years and, if possible, for a longer period to give it the opportunity to provide the expected returns. But even in this case you must be comfortable with the risk of possible losses. Investing in the short term, two or three years, is not convenient, since that means that your investment would have to be readily available, something that can be easily achieved with a deposit.

 

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