What are the top 10 best investing tips?
1. Understand what you want to buy. If it's equities, learn fundamental analysis and equity valuation. If it's bonds, learn bond valuation and bond pricing. If it's foreign exchange, understand how micro and macroeconomy work and geopolitics. It all depends on the types of financial instruments you want to buy.
2. Define your goals. Understand what you want. What is your expected rate of return, and what losses are you willing to carry. The higher the return, the more losses you can expect. Equities and FX are the riskiest financial instruments. Equity ETFs are less risky than individual stocks. Bonds (investment grade) are less risky than stocks and so on. What market you will be trading on, and what is a country. If it is a developing country, you will have higher political risks and indirectly lose because of currency devaluation. And what is the size of your capital that you want to invest? The higher the capital, the less risky you should be.
3. Have patience. Don't be in a hurry. Don't invest just because everyone is investing. Take your time and do your research. Once you find what you want, wait the appropriate time to purchase your asset. The right time to buy depends on technical and fundamental factors connected to the company and external factors such as political and economic conditions. So to have a better idea and know the best time to buy, first study and do your research.
4. Don't invest just because everyone is investing. Have your investment strategy. Never repeat someone's investment decisions.
5. Don't rely 100% on technical analysis. TA is easy, and many people rely heavily on TA because they don't know how to undertake asset valuation and fundamental analysis. Investing is also a job. And as with any job, you should learn how to do it before even starting. Many new investors don't want to learn or do their math. They want to buy stocks and other assets and apply easy technical analysis, hoping that they can predict price movements. Yes, TA uses indicators and different figures, but still, it is elementary, and you don't need special training for this. Many new investors/traders start with technical analysis, and they devote too much attention to it. But, TA is not as important as many people think. It lets you see where the current stock price relative to the highs and lows, shows your historical trading activity and price fluctuations, and helps you develop a point where you open and close your position.
6. Never use impulsive trading. Always prepare before opening any position. Relax and have a detailed algorithm of what you will do. If you trade actively and open positions every day, prepare before the market opens. Devote 30–60 mins daily to do your market research. Don't do research when the market opens. When the market opens, you should already know what you will be buying and when you will sell purchased assets. Have your daily scenario. For example, what you will do if the market starts falling rapidly or what would be your actions if the market rises. Have this plan for every day. If you are a mid-term or long-term trader, understand your goals (desired risk/reward), what portion of money you will invest into each asset class, and when you will reconsider or rebalance your investment portfolio. You should also have a scenario.
7. Learn portfolio management. Don't just buy single stock or bond or any other asset class. Know how to diversify your investments. To do this, you should learn portfolio management. PM will tell you what portion of stocks or/and bonds you should have in your portfolio, and PM will tell you what % of each stock should be in your portfolio to get a higher return with the lowest possible risk.
8. Find a good brokerage company. It should be licensed, regulated, not in an offshore zone, and have a trusted bank custodian. Moreover, your brokerage company should have competitive commissions and execute orders fast, possibly with price improvements. It should be the US or European broker, but you can choose yourself depending on your investment goals.
9. Investing is not similar to making money. Investing is putting your money into something unknown. You may have profits or may not. There are so many factors, and you cannot control them all. You can get more money (profits) by investing, but you can also lose more because no one knows what will happen to your investment in the future, and its price can drop significantly. Making money, on the other hand, is receiving a stable income. It is by working on someone and getting a salary or putting your money into the deposit. It is not similar to investing money. You should clearly understand that you can lose your money if you invest.
10. Your best teacher is the actual market; You will learn a lot from your losses and make conclusions that will help you build your investment strategy.