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Wealth Creation Tips

By: Joy Block

Why learn the hard way by  losing your hard-earned dollars making the same old common investing mistakes.  It's much better to learn from the experience of thousands of investing  professionals over the last 100+ years.   Here are the top ten timeless investing tips. (See Part II of this article for the other five tips).

     
  1. Invest  for the long term. If you are looking for quick winnings all you're going to do  is lose money, sooner or later (don't be fooled if you're making money while  the market is rising, that's easy, the key is are you making money over the  long term even across inevitable market downturns).  By investing for the long term you are  picking investments that have a proven ability to appreciate over the next 5-10  years, and if there is a 6 month or even 18 month down turn, you still have a  good investment and time is on your side.
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  3. Diversify.  Don't put all your eggs in one basket.  You don't need to invest in 100 different  stocks or vehicles, but neither should you be overly concentrated in just  5.   Financial statistics show that by  having at least 20-25 separate investments, none being more than 5-7% of your  total position,  you have significant  diversification without the hassles or   costs of managing 100's of investments. Today another key aspect of  diversification is to be sure to invest in global stocks as well as U.S. stocks.
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  5. Be  patient & be consistent.  Don't chase  today's fad (or worse yet, yesterday's fad).   Research your options, choose carefully, put your money at work, and  then be patient.  If you chose  investments that should perform over the long term, then be confident in your  strategy and be patient, and don't panic sell when the market turns south for a  few months.
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  7. Save  regularly from your earnings.  Set aside  10% or more of every pay check automatically every month (a good idea is to set  up an automatic deduction to your savings account).  Then regularly take these savings and move  them to your investment account and buy regular amounts of stock (see Dollar  Cost Averaging) below. Follow good strategies for saving money on airlines and outdoor sign purchases.
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  9. Don't  spend your investment earnings; instead, reinvest them in your investment  portfolio.  As your investment portfolio  throws off earnings and profits, do not make withdrawls for a new boat or  remodel.  Instead, reinvest the money in  the investment account.  This way you  have the magic of ‘compound interest' working in your favor – your annual investment  earnings will grow ever higher because the underlying investment capital at  work is growing.

Time has shown that these principles will work with little  risk and great returns, so long as you don't freak out on every day's stock  market ups and downs.  And, best of all,  you'll have a unique and invaluable dividend every day of your life – the  ‘sleep at night' factor:  because your  investments are carefully and systematically deployed for the long term in a  well-diversified manner, you can live your life focusing on other issuesPsychology Articles,  knowing that your investment account is doing it's job:  growing safely and providing for your dreams.

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About The Author, Joy Block

Joy Block writes on a variety of web topics and recommends using an online buying and selling stocks online to help organize your life, keeping your files online for free with buying a share, and getting a head start on the new year with a list of stock brokers in usa

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